Oil prices and the future of the markets

After the optimism that prevailed in the oil markets over the last week and early this week, and the rise of prices to more than $ 40 a barrel, Markets again received a violent jolt caused to the decline of prices slightly on the background of a number of developments that led to the fall in prices.
Oil had risen earlier after a drop in US inventory levels contributed to allay concerns about oversupply bit and that would inhibit recovery in the price of crude in the future.
here , we’ll show some of the main reasons that led to the decline in the oil prices and the reduction of its rise and they are as follows:
– the big supply in the market adversely affect the level of prices and oil prices fell in Asia because of oversupply in the market, and pending US reserves data .
– The decline of US crude to its highest level this year with the closure of oil prices with slightly higher in the mid – week.
– Analysts expect that the US government to announce an increase of three million barrels in domestic crude stocks last week to mark high record levels for the sixth week respectively.
– the rise of the number of oil rigs in the United States for the first time since December last month, where the number of rigs rose for the first time since a 12 – week in the Baker Hughes oil services company, and this is the reason for an increase in the concern due to the return of the large flow of oil , which restores the widening gap between demand and supply for the benefit of supply.
– The weekly data of American Petroleum Institute indicated that an increase in higher – than – expected of the stocks of US oil reinforcing fears about the continuing rise in global supplies.
– The slowing of the global economy and the arrival of the United States to the point of self -sufficiency in oil approx.
– The technical analyzes of senior experts indicate to the oil needed for a long period of stability after rising by 18% so far this year.
– To underestimate of the oil agreement between the producers in OPEC about freezing of the production ceiling , where experts in the international energy agency believes that the agreement “does not make sense.”
– the newspaper “Wall Street Journal” warned on March 14 price saying that the recovery of prices may be the reason for the drive for a new phase of price collapses because it will encourage shale oil producers and sand to raise the output again like pouring cold water on the international energy agency report that predicted a fall of the US production . According to estimates of “Goldman Sachs” Commercial consultant bank which specializes in prices of strategic goods “if prices rose to $ 50 a barrel , for example , we will face the same problem after 6 months and get back to square one .”
Here , Daniel Ang , an analyst at Phillip Futures indicates : “We have to surplus in net supply will continue in the short term, which leads us to believe that the current upward trend is not sustainable.”
As well as the special envoy of the US Department of Foreign Affairs , International Energy, Amos Hoxstein said , “I doubt very much in this agreement. Freeze production by the states to near high historic levels it will not change the situation in the oversupplied market. ” He said: “As I doubt very much in Iran ‘s commitment after the lifting of sanctions, with the exports at low levels of sanctions era.”
The price of oil had risen earlier, after data showed a drop in US crude stocks for the first time since the last January , also commodity prices are risen in general.
Remarkably , the emergence of a report that highlighted on the possibility of making of the international energy agency a terribly mistake in its estimates of global crude oil production ,and it had negative repercussions on global oil prices . and the International Energy Agency concerned with energy policies between the producing countries issued monthly reports which indicate the size of the supply and the amount of oil demand in the markets, and therefore, the expectations and estimates of the agency had the impact on prices.
The volume of the world ‘s oil supply is about 96 million barrels per day, This means that the “lost” barrels accounts for about 8% of the supplies and have a significant impact on oil prices, especially in a time of oversupplied markets .
Qatar called OPEC members and major oil producers outside the organization to the meeting on 17 April to agree a freeze on supplies in the wake of a preliminary agreement in February between OPEC members , Saudi Arabia, Qatar and Venezuela in addition to Russia -the major producer outside the organization – to keep supplies at January levels.
Finally , the atmosphere is still characterized by a sense of optimism about the future of oil prices after the announcement of the date of a meeting to discuss prices, and a freeze on production in Doha during the next April / May , but the experts at the international energy agency underestimates of the importance of this meeting on oil markets, and the next meeting of the producers will be as a base from which predictions about oil prices will emege.

Rawabet Research and Strategic Studies Center