The price of a barrel of Kuwaiti oil jumps 10%, supported by OPEC + cuts

The price of a barrel of Kuwaiti oil jumps 10%, supported by OPEC + cuts

The price of a barrel of Kuwaiti oil received support from the decisions taken by 9 OPEC+ countries to offer voluntary production cuts of 1.6 million barrels per day.

Last week, OPEC countries decided to take precautionary measures to control oil markets by raising the total volume of coalition cuts to 3.66 million barrels per day, including a cut of two million barrels in October, equivalent to about 3.7% of global demand.

A recent report revealed that the price of a Kuwaiti oil barrel has increased by about 10% since the decision of the OPEC + alliance to cut production, to trade at levels of $87 a barrel during this April, compared to $79.3 last March.

Oil production in Kuwait reached 2.68 million barrels per day in February, marginally down 11,000 barrels per day from the previous month, but it was 7,000 barrels per day higher than its quota by OIC+, with a compliance rate of 95%, according to the data seen. It has a specialized power platform.

Crude oil prices

A report by the National Bank of Kuwait indicated that oil prices took a downward trend in March, in light of concerns about the turmoil faced by banks in the United States and Europe and the consequent increase in risk-averse sentiment in financial markets during the first half of the month.

The Kuwaiti report indicated that the price of Brent crude fell to $73 a barrel on March 17, its lowest level since December 2021, before it rose again during the last two weeks of the month, to reach $79.8 a barrel, down by 4.9% on the basis of Monthly, 7.1% since the beginning of the year.

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The Kuwaiti bank said that the rise at the end of March came with the easing of concerns about international banks and the vulnerability of supplies in northern Iraq to some disturbances, according to the Kuwaiti newspaper Al-Anbaa.

A worker at a Kuwaiti oil site – archive

OPEC+ cuts

The report pointed out that market sentiment continued to improve during this April, with prices rising by more than 8% in the first trading session, after 9 OPEC + countries, led by Saudi Arabia and Kuwait, announced production cuts, as the price of Brent crude reached $85. at the beginning of the month.

The report indicated that the price of a Kuwaiti oil barrel decreased by about 4.4% in March to $79.3, down by 3.3% since the beginning of 2023. However, it has increased since the announcement of an increase in production cuts by OPEC + to $87, an increase of 9.7%.

Saudi Arabia had announced – on April 2, 2023 – a voluntary cut of 500,000 barrels per day, followed by Iraq with 211,000 barrels per day, the UAE with 144,000 barrels per day, Kuwait with 128,000 barrels per day, Kazakhstan with 78,000 barrels per day, and Algeria with 48,000 barrels per day. Oman, 40,000 barrels per day, and Gabon, 8,000 barrels per day.

The Kuwaiti bank said that the total cuts amounted to 1.65 million barrels per day, which would reduce the production of OPEC and its allies from 38.2 million barrels per day (excluding Iran, Libya, Venezuela and Mexico) in February, to 36.7 million barrels per day for most months of the year.

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oil supplies

Oil prices received support in late March when Turkey stopped exporting 400,000 barrels per day of oil from the semi-autonomous Kurdistan region through its territory, after the decision of the arbitral tribunal of the International Chamber of Commerce in Paris in favor of Iraq in its dispute with the Kurdistan Regional Government.

The report indicated that sentiment was weak in general in light of the increasing bets of speculators on the decline in oil prices, as the short selling of oil futures contracts increased, in addition to the disappointing market reaction to the Iraqi supply disruptions.

Price pressures emerged in March despite IEA estimates that were more optimistic about oil demand growth next year.

In its report on the oil market for March, the International Energy Agency cited strong expectations for consumption in non-OECD countries, especially China, after easing the measures imposed to confront Corona, which raised expectations for oil demand for the year 2023 by 100 thousand barrels per day. , bringing the annual average to a record high of 102.02 million barrels per day.

OPEC also kept its overall estimates of oil demand growth for the current year unchanged in March, amounting to 2.3 million barrels per day, although it revised expectations and cut growth estimates for the first and second quarters of 2023, as a result of weak demand for countries belonging to the Economic Cooperation Organization. and development.




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