Oil Stocks- Oil gains are expanding.. the decline in stocks and the recovery of travel and aviation traffic support the recovery in demand
Crude oil prices continued their price gains for the fourth consecutive day, influenced by the recovery of demand and the decisions of “OPEC +”, which pushed Brent crude to its highest level in two years and US crude to its highest level in three years.
Prices also received strong support from the decline in US oil inventories, in addition to strong economic data in China and the United States, and the recovery of travel and air traffic in Europe.
He told Al-Eqtisadiah, specialists and oil analysts, “The gains in crude oil expanded with signs of a recovery in demand in the United States and Europe, which sparked optimism and supported market sentiment, which was clearly evident during the meeting of producers in “OPEC +”.
The specialists explained that “OPEC” and its allies succeeded for more than a year in lifting prices from their historical lows and adding supplies at accurate and cautious levels, and they are now able to face the current counter challenge, which is the possibility of a supply deficit, which ignites prices to record levels that feed inflation fears. “.
The specialists pointed out that “OPEC +” relies on a long-term work vision and takes into account the management of the dual risks of the possible return of Iranian supplies in addition to the possibilities of the re-emergence of the virus and its variables, noting to the words of Muhammad Barkindo, Secretary-General of “OPEC”, “The pandemic is a permanent enemy.” It is unpredictable, and new mutations remain a threat.”
In this context, Dr. Philippe Debisch, head of the European Energy Initiative, said, “Everyone realizes that the current stage in which the market is witnessing strong demand, after Brent crude jumped to the highest daily level since January 2020, and futures prices also rose,” noting that the markets also received support. Data from the International Energy Agency sees a strong recovery in consumption in the next six months.
He pointed out that the continued restoration of demand to its vitality promises more balance in the market during the current year and also warns of the possibility of a tightness in the oil supply in the markets, noting that the reopening of economies, the spread of vaccines, and the recovery of travel and aviation traffic is strongly supportive of the rise in demand, and this coincided With the stalled international negotiations on Iran, which made it difficult to return Iranian supplies to the markets soon.
For his part, Mofeed Mandra, Vice President of the Austrian LMF Energy Company, stated that prices are heading towards more gains, especially with the end of the fifth round of Vienna negotiations without reaching an agreement on reviving the 2015 Iranian nuclear agreement, while demand is receiving a strong boost from High consumption in the summer and driving season in the United States, as the demand for gasoline in the United States is currently at its highest level since the start of the epidemic.
He pointed out that the opposite challenges in the market are currently mainly in the faltering demand and declining consumption in Asia, where gasoline sales in India collapsed to the lowest level in a year due to the spread of the current violent wave of the epidemic.
For his part, Andre Gross, director of the German energy company MMAC, says that the “OPEC +” group maintains calm and cautious policies in dealing with the fragile situation in the crude oil market, and has adhered to implementing limited gradual increases despite the growth in demand significantly. It is strong and exceeds supply by about one million barrels per day, according to estimates by Russia and the International Energy Agency, which bodes well for further price gains, especially if Asian countries succeed in overcoming the repercussions of the current crisis.
He pointed out that the rise in demand appears strongly in Europe and the United States, and was represented by a significant decrease in stocks, and some international companies expect that the current economic recovery will lead to the launch of a super cycle in the energy industry that will increase profit margins, especially for the largest energy companies and service companies. oil fields in the world.
The announcement of “OPEC +” to adhere to its plan to increase oil production in next July, reflects the positive sentiment in the market and confidence in the recovery of demand, with caution in making broad increases that disrupt market stability and price gains, according to Winnie Akilo, an American analyst at African Engineering International. .
She stressed that the market is speculating about whether the group will add more supplies later this year to keep pace with the accelerating global recovery, noting that oil prices rose above $ 71 a barrel as a result of the increase in demand for gasoline and diesel in the United States, China and Europe, which boosted Inflation fears, especially in consuming countries that are already suffering from high energy costs, pointing out that “OPEC +” did not rule out subsequent increases in supply after evaluating the market on a monthly basis to keep pace with the expected demand booms.
On the other hand, with regard to prices, oil prices rose in the European market yesterday, extending its gains for the fourth consecutive day, with US crude recording its highest level in nearly three years, and Brent crude, its highest level in two years, after preliminary data in the United States showed a significant decline. in commercial stocks.
US crude rose 0.9 percent to the highest level of $ 69.37 since October 2018, from the opening level at $ 68.74, and recorded the lowest level at $ 68.65, and Brent crude rose by 1.0 percent, to the level of 71.96 percent per barrel, the highest since May (May) 2019, from the opening level at $71.24, and the lowest level at $71.16.
On Wednesday, US crude rose by 1.1 percent, and Brent crude rose by 0.9 percent, in the third consecutive daily gain, thanks to expectations of strong demand for fuel in the summer season in the United States.
In preliminary data, the American Petroleum Institute announced on Wednesday that commercial stocks in the country decreased by 5.4 million barrels during the week ending May 28, in the second consecutive weekly decline, exceeding experts’ expectations for a decline of 1.3 million barrels.
According to these data, total commercial stocks in the United States fell to about 483 million barrels, which is the lowest level since the week ending on February 26, in a positive sign of withdrawal levels in the largest consumer of fuel in the world.
On the other hand, data from the “OPEC +” alliance showed that by the end of this year, global demand for oil will reach 99.8 million barrels per day, compared to a supply of about 97.5 million barrels, which means that the market will turn into a deficit during the last quarter of this year.
Oil Stocks – Oil gains are expanding.. the decline in stocks and the recovery of travel and aviation traffic support the recovery in demand
Tags: Oil Stocks, Crude Stocks
Latest News on C N N.