Most of the readers of the specialized energy platform expect oil prices to rise above the $90 per barrel barrier in the coming weeks, supported by the OPEC+ countries’ moves to cut production.
The markets are facing a shortage of supplies, during the coming period, after Saudi Arabia announced the extension of the voluntary cut of one million barrels per day during August, with the possibility of extending it in the future, in addition to Russia’s intention to reduce its exports by about 500 thousand barrels per day next month.
The Saudi and Russian cut comes in conjunction with the continuation of voluntary cuts by 9 OPEC + countries, which raised pledges to cut production to 3.6 million barrels per day, to be implemented until the end of December 2024.
Energy platform survey
More than 52% of the participants in the Specialized Energy Platform survey expected Brent crude prices to exceed $90 per barrel in the coming weeks, in light of the approach of oil prices to the $80 barrier, and talk of lower supplies after the implementation of the Saudi cut.
While 36.5% of the respondents indicated that prices will not be able to break the $90 barrier in light of the challenges facing the global economy and fears of recession, with the continued interest rate hike by central banks to counter inflation.
At the same time, 11.2% of the respondents to the Specialized Energy Platform survey said that they do not know whether oil prices are likely to rise, in light of the extreme volatility in the markets in recent weeks.
Khaled Amer – one of the participants in the survey – believes that the fair price of a barrel of oil is $250 per barrel, after all prices have increased. As the price of lithium rose from 4 thousand to 70 thousand per ton, saying: “Everything rose except oil, 70 or 80 dollars is empty talk.”
To which Mustafa replied that reaching this price would precipitate the collapse of the global economy very quickly, while Mustafa Shukair said that any price less than $120 per barrel is unfair.
Oil prices
In recent days, oil prices have received support from the decisions of Saudi Arabia and Russia, amid expectations of growing demand in the second half of this year, driven by increased demand from China.
Oil markets continued to reap gains during the past week. As both benchmarks (Brent and West Texas Intermediate) achieved gains of about 1.8% and 2.1%, respectively.
And by 02:10 pm GMT (05:10 pm Mecca time), Brent crude futures – for September 2023 delivery – rose 1.26% to $ 79.49 a barrel.
The rise in oil prices came, during trading today, Tuesday, July 18, after the US Energy Information Administration expected a decrease in shale oil production in the United States by 18 thousand barrels per day during next August, to be the first drop since December 2022.
On the other hand, the Energy Information Administration and OPEC expect greater than expected growth in oil demand during the coming period, in conjunction with the increase in China’s consumption, during the past few months, according to what was monitored by the specialized energy platform.
In its latest report, OPEC expected oil demand to grow by about 2.44 million barrels per day this year, compared to last May’s estimate of 2.35 million barrels per day, bringing the total to 102 million.
The organization attributed the increase in estimates to the strong demand for oil in China during the past April and May, in addition to some recovery in the United States and Latin America.
The following infographic, prepared by the specialized energy platform, reviews the most important forecasts for oil demand during 2024 by 3 institutions:
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