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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    After "Sunday's surprise"... What is waiting for the oil price?

    Rocky
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    price - After "Sunday's surprise"... What is waiting for the oil price? Empty After "Sunday's surprise"... What is waiting for the oil price?

    Post by Rocky Mon 03 Apr 2023, 5:21 am

    After "Sunday's surprise"... What is waiting for the oil price?

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    Baghdad today - follow-up
    Oil-producing countries, headed by Saudi Arabia and Russia, resorted, on Sunday, to announcing a reduction in their oil production, starting from next month, until the end of this year, in a sudden measure a day before the “OPEC Plus” meeting, which will raise prices globally and affect consumers, according to experts. 
    Among the countries that took this decision are Russia, Saudi Arabia, Iraq, Kuwait, the Emirates, Oman, Algeria and Kazakhstan. 
    The Iraqi economist, Abd al-Rahman al-Mashhadani, said in a press statement that the voluntary production reduction by some countries reached 1.628 million barrels per day, which is an unexpectedly large number, considering that these countries are working to maintain price stability above $75 for what remainder of this year. 
    A source in the Saudi Ministry of Energy confirmed, to the official news agency, that the Kingdom’s reduction in oil production by 500,000 barrels per day is a precautionary measure aimed at supporting the stability of oil markets.
    While the UAE Minister of Energy and Infrastructure, Suhail Al Mazrouei, said that his country “will voluntarily reduce its oil production by 144,000 barrels per day, from next May until the end of this year 2023, in coordination with some of the countries participating in the OPEC Plus agreement.” This voluntary reduction is a precautionary measure to achieve balance. 
    In Moscow, Russian Deputy Prime Minister Alexander Novak also said that Moscow will extend a voluntary cut of 500,000 barrels per day until the end of 2023 "as a precautionary measure to hedge against further market volatility." 
    Al-Mashhadani said that Russia announced in February that it had cut production by about 500,000 barrels, but what encouraged other countries was Saudi Arabia’s announcement to reduce its production by another 500,000 barrels, noting that these “decisions come after the shock that occurred in prices last week when it decreased.” The price of a barrel of oil is below $70, and therefore this is a reaction.” 
    Oil prices fell to their lowest levels in 15 months as a result of the banking crisis that followed the collapse of two US banks and led to the bailout by Swiss bank UBS of smaller rival Credit Suisse.
    Amrita Sen, founder and director of Energy Aspects, said on Sunday, "OPEC is taking proactive steps in anticipation of any possible drop in demand," according to what was reported by Reuters. 
    For his part, a spokesman for the US National Security Council said that he does not believe that "OPEC Plus cuts are reasonable at this time, given the uncertainty in the market."
    Al-Mashhadani explained that the idea of ​​voluntary production reduction may have proven successful today, "as OPEC was issuing an official decision to reduce production that must include everyone, each according to his share, while countries such as Venezuela were opposed to such a decision, but this time the reduction was voluntary. By countries that believe that their interest is with the price hike, and therefore the result was perhaps more than the expectations of the OPEC Plus meeting, about which the talk revolved around reducing production by one million barrels, but with the decisions that were issued, we reached one million and 628 thousand barrels, and this is a very large number. 
    He added, "They benefited from the experience of 2020 when prices collapsed dramatically, and when the oil-producing countries agreed to reduce production, prices rose again," noting that "each country calculated a mathematical issue, and reduced it to a level that compensates it for the loss it will incur as a result of selling fewer barrels." , "Maybe the profits will be more." 
    The Reuters news agency quoted the head of the investment company (Pickering Energy Partners) as saying that the unexpected reduction of production by OPEC producers may raise world oil prices by $10 a barrel.
    Dan Pickering said that the production cut "will provide tangible support for prices ... it is possible that prices will move ten dollars (a barrel) of crude."
    Al-Mashhadani expects the price of a barrel of oil to reach $85 a barrel during the next few days. 
    He said that this will reflect positively on oil-producing countries by increasing financial surpluses in their public budgets. 
    As for the oil-consuming countries, "certainly any increase in the price of a barrel of oil will negatively affect basic materials in the market and energy costs," according to Al-Mashhadani. 
    A spokesman for the US National Security Council said that the administration of President Joe Biden will continue to work with all producers and consumers to ensure that the oil market supports economic growth.
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