*Osama Suleiman from Vienna and agencies
Oil prices jumped yesterday, hitting its highest levels since late 2014 as the US crude inventories fell near the five-year average. Saudi Arabia, the world's largest oil exporter, is seeking to push crude prices up to about $ 100 a barrel, sources said.
According to Reuters, crude oil futures for Brent rose to $ 74.73 a barrel, the highest level since November 27, 2014. It was the day OPEC decided to pump as much oil as it could to defend its market share, which pushed prices down to just over $ 27 a year later.
Brent crude futures were $ 74.62 a barrel, up $ 1.14 from the previous close. WTI crude futures rose 98 cents to reach $ 69.45 a barrel. The US crude hit $ 69.56 earlier, its highest level since Nov. 28.
The Organization of the Petroleum Exporting Countries (OPEC) and other major producers, including Russia, have begun curbing production in 2017 in order to suppress the excess supply, which has been squeezing prices since 2014.
OPEC and its partners are scheduled to meet in Jeddah today, and OPEC will meet next June 22 to review its oil production policy. The sources said yesterday that Saudi Arabia would be pleased to see crude prices rise to 80 or even $ 100 a barrel, which is seen as an indication that there are no signs of changes to the production reduction agreement.
Two sources familiar with the report said that a joint technical committee between OPEC and independent producers believes that the global oil supply has been almost eliminated, which is due to the OPEC-led supply reduction agreement, which began in January 2017.
According to one source, the technical committee meeting found oil stocks in developed countries amounted to 12 million barrels in March, compared to an average of five years.
The stated goal of reducing supply is to reduce the surplus of oil stocks to an average of five years, but a number of oil ministers said, "Other measures must be taken into account. "The US Energy Information Administration reported that crude stocks in the United States fell last week, as refineries cut production, while gasoline inventories and distillates fell.
Crude inventories fell 1.1 million barrels over the week ending April 13, while analysts forecast a 1.4 million barrel drop.
Refinery operating rate fell 1.1 percentage points, and gasoline stocks fell 3 million barrels compared to analysts' expectations in a survey that the decline would be 227 thousand barrels. According to the information management data, distillate stocks, including diesel and heating oil, fell 3.1 million barrels versus expectations of a 268,000 bpd decline. US net imports of crude fell 1.3 million barrels per day to reach 6.18 million bpd last week.
Even though, the International British Petroleum Corporation (BP) confirmed that although the energy view as a whole in the world shows the abundance stage of energy. There are still billions of people suffering from energy poverty, while more than a billion people around the world suffer from electricity shortages.
"Electricity use in sub-Saharan Africa is only 43 percent, where most people in Africa still do not have enough electricity," a recent report by the British company said.
It added, "The biggest challenge in the world today is to provide reliable and affordable energy to the entire world and raise the level of billions of low-income people, and to do so using cleaner energy that supports the climate goals under the Paris Agreement. In order to meet this dual challenge, we will need to rely on fuel of all types and sources of energy. "
The report pointed out that renewable energy sources are important and fast growing, faster than any fuel in history. But, as the previous shifts in energy have shown, it takes some time to make good progress in this regard.
The report stressed the presence of a continuous and strong role of crude oil where strong efforts are being made to improve methods of employment based on increasing levels of efficiency.
It pointed out that there is also an increasing role for gas that can be burned in reasonable quantities and cleaner, thus to reduce emissions on a large scale when replacing coal in power generation.
Dan Bosca, senior researcher at British bank UniCredit, said to the Economist, "The price of crude oil is moving steadily and strongly towards further gains. The biggest support comes from OPEC efforts, led by Saudi Arabia, to stimulate prices, which is making many betting on the possibility of a return of crude oil prices to the level of one hundred dollars a barrel."
Bosca expects that the Jeddah meeting will most likely confirm producers' insistence on continuing to apply production cuts until the full surplus of stocks is depleted and a stable crude oil market has been established, after the launch of a long-term strategic partnership between OPEC producers and others led by Saudi Arabia and Russia, which recently developed a tremendous amount of harmony and coordination in oil policies.
For his part, David Ledesma, an analyst at South-court Energy Consultancy,said to the Economist that the sharp declines in the production of Venezuela, which reached a critical stage and seriously reduced much of the oil supply, especially as it came in conjunction with voluntary and optional cuts by Saudi Arabia to restore balance in the market and correct the relationship of supply and demand. Ledesma noted that Saudi Aramco's upcoming IPO comes in a very positive atmosphere in the market and at good price levels, which will spur international investors to compete in this unprecedented mega-venture, the largest in the history of the financial markets.
In addition, Andrew Morris, director of Poyry for international consulting, explained to the Economist that the recovery of crude oil prices in the interest of the global economy and in the interests of producers also, as it will promote investments and drive development efforts, which is shared by all producing and consuming countries. He pointed out that rising prices would not prevent the move forward in the plans of economic diversification and increase dependence on various energy resources.
Morris added, "US rock oil has already made large gains from the recovery of oil prices, but it is facing difficulties in the expansion related to infrastructure and the occurrence of bottlenecks in pipelines."
He emphasized that "OPEC" is well aware that high prices are not in their interest because they weaken demand and accelerate the pace of transition to other energy resources, especially electric cars as an alternative to the traditional car. He expected the Jeddah meeting and subsequent meetings to focus on avoiding excessive prices and ensuring a stable market.
