Oil prices bounced off, but not long

At the end of the week, oil futures jumped a little after a three-day fall. Movement may have an exclusively technical nature, since lower-level $ 100 per barrel Brent has activated speculative purchases. Meanwhile, today in the morning the descending wave continues. The nearest strong support can be a zone around $ 97.5 per barrel.

Sale of oil from reserves

It is expected that the MEA countries in the aggregate will be sold 240 million Barr. Crude oil in the next 6 months. In the next 2 months The average daily sales will be 2 million b / s, and in the next 4 months – 1 million b / s. This volume is intended to compensate for the falling supplies of Russian oil, which does not use honor in the European market and trades with a very large discount.

As of April 8, the URALS discount to Brent amounted to about $ 34.5 from the barrel. Buyers from Asia actively use this opportunity to reduce fuel costs, but to quickly redirect Russian deliveries to new buyers in full yet.

Oil Sales Countries MEA may temporarily cool the oil market and shorten the price. However, this will not eliminate existing imbalances of supply and demand, which may be aggravated by the end of the second quarter due to seasonal growth in gasoline demand. This means that the current wave of reducing quotations may be limited and expecting a significant fall in oil prices will be premature. Probably, quotes will not be devastated below $ 90 per barrel in the coming months.

OPEC + is experiencing problems with increasing Mining

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According to S & P Global Commodity Insights, in March, extraction of countries participating in OPEC transaction + has decreased relative to the previous month, for the first time more than a year. On Friday, the Minister of Oil Nigeria said that most OPEC countries have no additional reserve capacity to increase production.

“Requires a lot of work and a lot of investments to get additional production – quotes the Minister of OilPrice.com, – if there is something that we can do to extract more, OPEC will be the first Who will better. But, unfortunately, there is no such potential in most OPEC countries. “

According to Goldman Sachs, all OPEC manufacturers +, except for Saudi Arabia and the UAE, are now produced less than at the beginning of 2020. Falling production in Russia, according to Vice Premier of the Russian Federation Alexandra Novaka, in April, can reach 4-5%. This is about 0.5-0.6 million b / c below the March level.

Lokda in China

In China, it is not yet possible to stop the outbreak of COVID-19 which swept the Shanghai with his population of about 26 million people. Hard Quarantine measures in the city persist, which limits the demand for fuel and is a moderate deterrent for oil prices. Earlier, such an outbreak was observed in August 2021. Its effect on oil markets was limited to several weeks.

Drilling activity in the USA

On Friday, Baker Hughes reported on the growth of the number of oil drilling in the USA by 13 mouth. and reducing in Canada to 11 mouth. The growth of drilling rigs in the United States is accelerating, however, the confidence that production in the country can significantly grow to the end 2022, until not. In terms of high price uncertainty and strong ESG-lobby, manufacturers fear to expand investment in new drilling and prefer to distribute profits between shareholders.

This morning, Brent futures are trading 2.1% below the level of closure of the previous day levels around $ 100.5 per barrel.

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