Crude oil prices ended the week’s trading on a rise, while it incurred the third consecutive weekly loss due to escalating global demand concerns, at a time when the market is apprehensive regarding the continuation of rising inflationary pressures, and then the US Federal Reserve and other central banks may rush to tighten monetary policies by raising interest rates. to combat inflation.
In this context, the international “Oil Price” report stated that the bearish sentiment has truly dominated the oil markets, as fears of a global recession are still the main factor in the oil markets, noting that there are many bullish catalysts, which are looming on the horizon this winter and in the future. The beginning of 2023, but this is not enough to distract the markets from the current conditions.
He explained that with stocks declining strongly, the threat of a global recession still looms on the horizon, as it seems that fears of an economic downturn are justified, noting that this comes amid widespread expectations that the Fed meeting next week will witness another sharp rise in interest rates. .
The report promised that sentiment in the oil market is undoubtedly bearish following oil prices recorded a third weekly decline in a row, while there are many bullish catalysts for oil markets in the not-too-distant future, but none of them is immediate enough to face the current economic concerns.
And he warned that the averted rail strike frightens the US energy sector, with US railroads and unions agreeing an initial deal this week and averting rail shutdowns across the country, citing reduced risks of major disruption to commodity markets.
He cautioned that gas futures rose 10 percent in just one day, as the strike would have hindered rail deliveries, considering that this fear highlights how accurately the US energy markets are currently balanced.
He highlighted India’s start of rupee trade with Russia following the State Bank of India agreed to facilitate the new trading mechanism, which means that an increased volume of commodity transactions will be carried out without the dollar, noting that Venezuela – one of the most prominent producers of “OPEC” – is threatened with more of sanctions if negotiations with the opposition, led by Guaido, fail to achieve any results, following it has already imposed sanctions on more than 140 entities, including the central bank and the national oil company.
The report stated that US West Texas Intermediate crude futures for December are trading sharply lower following an initial agreement that would avert a US rail strike that wiped out three days of speculative gains, as sellers were also driven by expectations of weak global demand and continued dollar strength before an increase The interest rate will be increased by one percentage point next week by the Federal Reserve.
He promised that the news, that the rail strike was averted, drove prices lower but the basis for the selling was on the rise throughout the week, due to a number of bearish factors, which outweighed the potential bullish news.
For its part, the international “Reg Zone” report confirmed that the estimates of both the Energy Information Administration and the “OPEC” secretariat regarding the implied changes in the global stockpile in 2021 and the first three quarters of 2022 show a large deficit, pointing out that the estimates, on the other hand, indicate a surplus in the third quarter. About 1.82 million barrels per day.
The report quoted consultants and banks as saying that the decline in prices led to failures in the market mechanism, especially volatility and low liquidity.
He pointed to the limited impact of the strategic oil stockpile releases in the United States and the International Energy Agency on the market, adding that the United States alone transferred an average of 0.83 million barrels per day to commercial stocks in the third quarter.
He added that with a large surplus in the global flow, and those transfers available to rebuild stocks, the US oil data was mainly bearish in the third quarter of this year, estimating that the initial indicators of demand in this September are weak, as demand for all products fell on an annual basis except other oils.
He pointed out that the distillate data is particularly weak with a significant increase in inventories of 4.22 million barrels and the lowest implied demand in 20 months, quoting international analysts that oil markets remained relatively calm with the extension of West Texas Intermediate crude to settlements next month below $ 100 a barrel.
On the other hand, with regard to prices at the end of last week, oil prices rose during Friday’s trading, but they are still suffering from incurring some losses as a result of concerns regarding global demand for crude.
This comes in light of the release of US inflation data, which recorded a reading higher than expectations, which indicates the continuation of rising inflationary pressures, and therefore, the US Federal Reserve and other central banks are rushing towards tightening monetary policies. Some analysts fear that price increases will lead The interest leads to a global economic recession, which harms the demand for commodities, including oil
This comes as oil prices fell in the European market on Friday, continuing their losses for the second day in a row, as they incurred the third consecutive weekly loss due to the escalation of global demand concerns. And pressure on prices was also the rise in crude inventories in the United States for the second week in a row in a negative sign for the levels of withdrawal and domestic demand in the largest consumer of fuel in the world.
US crude fell 0.9 percent to the level of $ 84.29 a barrel, from the opening level at $ 85.09, and recorded the highest level at $ 86.21, and Brent crude fell 0.4 percent to the level of 90.29 percent a barrel, from the opening level at $ 90.65, and recorded the highest level at $92.26.
On the other hand, the total number of active drilling rigs in the United States increased by four this week, as the weekly report of the American company “Baker Hughes” drilling activities indicated that the total number of rigs rose to 763 this week and 251 rigs higher than the number of rigs this time in 2021.
The report pointed out that oil rigs in the United States increased by eight this week to 599, and the number of gas rigs decreased by four, to 162, as various platforms remained unchanged at 2, noting that the number of rigs in the Permian Basin increased from three to 343 this week, as the number of rigs increased Eagle Ford rigs are up 1 to 72, and oil and gas rigs in the Permian are up 84 higher than they were at this time last year.
He stated that despite its year-over-year rise, active drilling activities in the Permian have remained near the current level since mid-May when the number of oil and gas rigs was 342.
He pointed out that crude oil production in the United States remained at 12.1 million barrels per day for the third week in a row for the week ending September 9, according to the latest weekly estimates of the Energy Information Administration, stressing that production levels in the United States increased by 400,000 barrels per day on an annual basis and an increase of two million barrels. per day, compared to last year.
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