Report: Oil is tightened by strong demand and continued OPEC-led production cuts
Singapore - Baghdad / Reuters - Range
The easing, coupled with the growth in demand for crude, pushed oil prices up 60 percent since mid-2017 as investors agreed to buy oil futures in anticipation of higher prices.
Oil has been supported by the dollar, which has lost more than 3 percent of its value against a basket of major currencies since the start of the year, and has fallen about 13 percent since January 2017.
US crude production has risen more than 17 percent since mid-2016 to 9.88 million bpd in mid-January. Production is expected to exceed 10 million barrels soon.
Oil prices gained support from the Davos conference, with the comments of the most prominent figures in the Organization of the Petroleum Exporting Countries (OPEC) adding more positive to investors and speculators.
Concerns about increased oil production in the United States did not affect oil prices last week, as prices rose despite the fact that oil rigs in the United States recorded the highest weekly increase since March last year, amid increasing production to levels not seen in America since more From 40 years.
Saudi Energy Minister Khalid Al-Falih said that OPEC and its non-OPEC producers would come out of production cuts in a gradual and smooth manner so as not to shock the markets in early 2019 when demand is slowed by seasonal factors. "It is very unlikely that the cuts will come out in June when OPEC holds its next meeting," he said, adding that it could only be modified at some point. He also said OPEC could adjust the level of stockpiles it targets for its production cuts.
"The oil market will balance this year, expecting strong growth in demand this year," OPEC Secretary-General Mohamed Barkindo said in an interview with Bloomberg.
In a related context, estimated oil expert Hamza Jeweler, the government surplus by 25 billion dollars in the budget this year, in the event of continuing oil prices for about $ 70, adding that the surplus will end the budget deficit and strengthen the cash reserves with the Central Bank about 10 billion dollars.
The Jeweler said that "the government estimated the price of one barrel of oil in the budget this year about $ 46, but the high oil prices significantly, contributed to the strengthening of the budget," noting that "the rise of oil prices of one dollar per barrel in a year, will provide the government more Of $ 1 billion and in the event of collection of surplus amounts will be about $ 25 billion. " He added that "the deficit in the budget of about $ 15 billion, and if a surplus of about $ 25 billion, will end the deficit and strengthen the reserves of the Central Bank about $ 10 billion, such as payment of dues of the bank after the government borrowed during the past period huge amounts of it."
The jeweler that "the rise in oil prices came because of the consensus of the oil-producing countries to reduce production to raise the world price, as well as the depletion of all oil stocks of traders speculators in international prices."
For his part, the expert said in the name of Antoine, that the surplus obtained by the Iraqi government due to high oil prices, will address the fiscal deficit in the budget of 2018.
Antoine said in a statement, "The financial budget for 2018, including a 13-trillion-dinar, Private bottom and non-oil transactions ".
He added that "the budget of 2018 calculated the price of a barrel of oil at $ 46, and now it is sold more than $ 65," noting that "this increase will help the budget to overcome the deficit."