Experts: Oil recovery “temporary” and prices expected to drop

Experts: Oil recovery “temporary” and prices expected to drop

Posted 10/02/2015 11:45 AM

Experts - Oil recovery temporary and prices expected to dropAlthough oil recovery breath over the past three days, as prices continue to rise to $ 60 to touch the affected expectations OPEC to increase demand for its oil, but experts in the oil Affairs confirmed that this mutation temporary and that prices likely to decline due to continued oversupply.

They pointed out that the news about the decline in the number of US oil rigs, will be a catalyst for long-term price hikes. And about what their expectation to report Citibank and that prices may come down until the range of $ 20 before recovering to reach a new level equivalent.

The expert said the oil affairs full Harami “The revelations report is not new, and everyone knows that speculators were behind the price recovery in the past few days, he said,” if you do not mention a report (Citibank) for the price expected around $ XX, what turned him one. ”

He predicted “Citibank” to reach the oil market fell to the bottom end of the first quarter of the year and the beginning of the second quarter.

Investment bank cut its forecast for the price of Brent oil in the Mediterranean in 2015 to $ 54 a barrel from $ 63 and expect to reduce the price by $ 2016 to $ 69 a barrel.

The bank also cut its forecast for the price of WTI US in 2015 to $ 46 a barrel from $ 55 in the previous estimate, while lowering its forecast for 2016 to $ 61 a barrel from $ 62.

The price of oil has achieved in the past few days, up to yesterday, to $ sixty, where the price jumped ore global measurement Brent 60 cents in futures for March delivery of up to $ 58.40 a barrel after rising to $ 59.06 earlier in the session, and US crude price of $ 53.15 a barrel, up $ 1.46 after reaching the highest level in the session to $ 53.40 a barrel.

An imbalance of supply and demand

Experts in oil affairs and confirms that recent gains are only temporary jump, especially since the oil market is still suffering from oversupply, and that most countries produce at full capacity, and that many countries defend their shares in all markets, and stressed that the market balance will not be before the season The third of this year.

In this regard, commenting expert in oil Affairs Mohammad Al-Shatti for “Arab News” that the imbalance of demand and supply is the reason for the weakness of the market, despite the recovery that stands behind the reasons for, and confirms there will be no recovery without the withdrawal of the surplus from the market and is an agreed order “.

“There is a conviction that he would be a recovery, but there is also disagreement about the timing, he said,” The level of oil prices, a candidate for the landing because of the surplus was up to $ 40, and in the future under the current developments. ”

He said, “Iran and Libya return to normal production would strengthen the presence of the surplus is also located, and enter these two products would reduce the supply of cut.”

OPEC: higher demand in 2015

The organization “OPEC” has announced on Monday that it expects demand for its oil this year will be much higher than previously thought at a time when the Organization’s efforts to protect its market share from other producers strategy began to bear fruit. In its monthly report issued on Monday, the organization predicted that the average demand for its oil 29.21 million barrels per day in 2015, an increase of 430 thousand barrels per day from the previous forecast.

If these expectations have been met, the demand for OPEC oil will exceed last year’s level with OPEC cut its forecast for growth in production from outside the organization in 2015 by one-third because of slowing oil shale boom in the United States and the decline of oil investments in the world.

OPEC said “because of” falling non-OPEC supply, “mainly due to the Declaration of international oil companies cut capital spending in 2015, as well as a decline in the number of drilling rigs operating in the United States and Canada.”

OPEC said that the supply from outside the organization this year will only 850 thousand barrels per day, or less than 420 thousand barrels per day from its estimate in a report last month. OPEC has kept production levels unchanged at its last meeting in November, despite falling prices in an effort to slow down the pace of the high cost of production in the United States and others who had found support in approaching the average price of $ 110 a barrel from 2011 to 2013.

Although many of the twelve Member States in OPEC affected by falling prices, the high cost of projects around the world come under pressure as well. The price of Brent crude lows after 2009 at $ 45.19 per barrel on 13 January.

This was reflected in the largest reduction in the forecast for OPEC oil supply since revised its forecast downwards to the American production of 170 thousand barrels per day from last month’s estimate in light of the low number of drilling rigs.

Low expectations

The organization also cut its forecast for Russia’s production by 70 thousand barrels per day compared to last month and cut its forecast for production of the Middle East countries outside OPEC by the same amount.

Demand is expected to grow by 1.17 million barrels per day next year to 92.32 million bpd, up slightly from last month’s forecast, as lower prices boosts consumption rate.

The organization said that the low supply outlook still depends on the prices stay low in the first half of the year class, which leads to slower production.

OPEC quoted secondary sources say that the Organization production reached 30.15 million barrels per day in January, down 53 thousand barrels per day from December