A report by the British Oil Price website, which specializes in economic and energy affairs, confirmed on Thursday that oil markets are exposed to a storm of economic concerns, which led to an extended decline in oil prices, exacerbated by the latest phase of hedging by banks, as the crushing decline pushed the prices of crude oil and oil products to the most bearish limit since the beginning of the global financial crisis in 2008.
“The price of a barrel of oil, which reached $68 since September 10, represents the lowest price since December 2021, and while oil prices have risen by about $5 per barrel per week since then, commodity analysts at Standard Chartered indicated that this represents a limited recovery at the present time,” he added.
“Oil markets are ignoring the imminent reduction of more barrels from the market in the coming months as Russia, Iraq and Kazakhstan have submitted their compensation plans to the OPEC Secretariat for the excess crude oil production for the first six months of 2024. According to OPEC, the entire excess production will be fully compensated over the next 15 months until September 2025, with Russia cutting 480,000 barrels per day, Iraq 1,184,000 barrels per day and Kazakhstan 620,000 barrels per day,” he continued.
The report explained that “high-level visits to Iraq and Kazakhstan by OPEC Secretary-General Haitham Al-Ghais indicate that OPEC intends to follow through on the promised cuts. Al-Ghais said after visiting Baghdad, “I received strong assurances that Iraq remains fully committed to ongoing market stabilization efforts. During this visit, Iraq presented clear and decisive steps to compensate for overproduction and gave assurances that it will achieve full compliance in the future.”
The report indicated that “in another bullish catalyst, the latest weekly data from the US Energy Information Administration revealed that crude stocks at the West Texas Intermediate pricing point in Cushing, Oklahoma, fell for the fifth week in a row and for the ninth week in the past ten weeks. Crude stocks also fell by 1.7 million barrels per week to a ten-month low of 24.69 million barrels, and are now about 11.25 million barrels below the five-year average.”
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