The report of the International “Platts” agency for oil information expected that Asia will witness a growth in demand of more than one million barrels per day in 2023, while the flow of Russian oil to India and China will increase, suggesting that the revival of Asian demand for oil will be delayed to pre-epidemic levels until 2023, as A worse-than-expected consumption outlook in China on the back of the pandemic-induced shutdown will offset the gains.
He stressed that the Chinese demand for oil coincides with the distress fears of endless closures and the impact on the overall consumption of crude in Asia will be huge and as a result it will be difficult for Asian demand for oil this year to rise to the level we saw in 2019 before the epidemic.
The report expected Asian oil demand to grow by 510,000 barrels per day in 2022 after adjusting downward again mainly due to China, but demand growth in Asia is expected to rise again above 1 million barrels per day in 2023, as the Chinese engine begins in back to normal, accounting for 45 percent of regional growth.
Crude oil prices recorded sharp declines at the end of last week due to fears of recession and weak global demand, especially with raising US interest and increasing expectations of a possible recession, as US crude lost 6.1 percent, while Brent crude fell 5.3 percent on a weekly basis, and the dollar index recorded the highest level In two decades, no pressure on oil.
He added, however, that there is still the risk of a further downward adjustment due to the intermittent closure of China and with increasing fears of global and regional economic stagnation. in Ukraine.
The report considered that high energy prices complicated the task of Asian policy makers, forcing central banks to focus on containing inflation even as demand continued in the face of the problem of a renewed epidemic in many parts of the region.
For its part, the international “Oil Price” report indicated that crude oil prices fell by 5 percent, with the US index falling to its lowest level since January on the back of growing concerns about slowing economic growth and a looming recession.
He pointed out that fears of slowing oil demand amid a possible recession outweighed the escalation of the Russian war in Ukraine, pointing to a previous jump in crude oil prices that came after Russian President Vladimir Putin’s decision to “partially mobilize” 300,000 soldiers to send them to fight in Ukraine, in the first mass recruitment. In Russia since World War II.
He focused on the impact of the dollar’s strength and the intensification of fears of a recession with major central banks raising interest rates again to fight inflation as the Federal Reserve raised the main interest rate by another 75 basis points for the third time in a row, and the next day saw the Bank of England raise interest rates by 50 basis points to 2.25 percent, the highest rate since the start of the 2008 financial crisis.
The report pointed to a downward trend in crude oil after a decrease in the risk appetite in the market, with Saxo Bank confirming that the growth concern has increased slightly, as the dollar and returns continued to rise, considering that the global economy and the oil market passed a difficult quarter, at a time when the Pricing growth risks as the market has been left to worry about the impact of supply cuts resulting from the EU embargo on Russian oil and fuel, as well as a partial reversal of the US selling 180 million barrels of its own production.
He stated that sentiment in the oil markets had been bearish in recent weeks due to the risk of an escalation of the war between Russia and Ukraine.
The report indicated that the “American Fed” fulfilled its promise to address inflation aggressively and raise interest rates to their highest level since 2008 by raising 75 basis points, which confirms analysts’ fears that its primary goal to curb inflation will exceed any concerns related to oil. The Russian-Ukrainian war has led to renewed fears of Russian supply cuts that combined with news that China has finally opened up its cities after several months of closure has fended off downward pressures, at least for the time being.
He stated that the European Union is preparing the eighth sanctions package for Russia, with Russia expected to annex parts of eastern Ukraine after the referendums currently taking place, while the European Union is looking to put in place another package of sanctions that would put more stringent restrictions on high-tech exports and implement a ceiling on oil prices at the group level.
The report expected that the European Union would exempt the United States from carbon rules, as the European Union exempts the United States from the carbon limits tax, which is expected to start in 2026, provided that the United States has the same path in terms of reducing emissions.
The report indicated that once the issuance of the US Strategic Petroleum Reserve is stopped, US refineries are expected to double their purchase of cheap Canadian heavy oil from Alberta.
On the other hand, with regard to prices at the end of last week, oil prices fell during yesterday’s trading on a large scale, in light of concerns about global demand as a result of possible signs of recession.
This comes in the wake of the decision of the Federal Reserve and other global central banks that have tightened their monetary policies by gradually raising interest rates, and these decisions raise concerns about the stagnation of the global economy, which in turn negatively affects the demand for goods and services as well as spending.
In terms of trading, US “NYMEX” crude futures for November delivery fell by 6.1 percent, to $78.4 a barrel. Brent crude futures for November delivery fell 5.3 percent, to $85.6 a barrel. The contracts for the nearest maturity of Brent crude and US crude 3.78 percent, and 5.37 percent, respectively, during the past week.
Global stocks hit a two-year low on Friday, while the dollar index hit a two-decade high, putting pressure on oil.
On the other hand, the total number of active rigs in the United States increased by one rig this week, with the total number of rigs increasing to 764 this week – 243 rigs higher than the number of rigs this time in 2021.
The report of the American company “Baker Hughes” concerned with drilling activities indicated that oil rigs in the United States increased by three this week to reach 602, while gas rigs decreased by two to 160 and the various rigs remained unchanged at two.
He pointed out that the number of rigs in the Permian basin increased from one rig to 344 this week, while rigs in Eagle Ford remained unchanged at 72, while oil and gas rigs recorded in the Permian 84, explaining that during its rise year after year, active drilling in the Permian remained close to the current level. Since mid-May.
He noted that US crude oil production remained stagnant at 12.1 million barrels per day for the fourth consecutive week of the week ending September 16, according to the latest weekly Energy Information Administration estimates.
The report indicated that production levels in the United States increased by 400,000 barrels per day so far this year, and increased by 1.5 million barrels per day compared to last year.
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