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The price of oil has fallen, but is expected to remain high
Dr. Gil Befman, Chief Economist of Bank Leumi: "Continued maintenance of OPEC +'s stringent production quotas, along with continued voluntary cuts in Saudi Arabia's oil production of one million barrels per day are expected to support high oil prices in the near future."
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Monday, 15 March 2021, 10:59 Updated: 11:20
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Chief Economist of the National Bank, Dr. Gil Chapman, today published his report weekly global oil market. Despite a slight drop in price recorded last week, Chapman believes that oil prices will maintain their current high levels, following a sharp decline due to the global slowdown imposed by the goalkeeper.
Here Highlights of the report:
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Development of the price of oil - The price of BRENT oil decreased from approximately $ 69.39 per barrel at the end of the trading day on 5/3/2021 to approximately $ 68.87 per barrel at the end of the trading day on 12/3/2021 and the price of WTI barrel decreased from approximately $ 66.09 per barrel at the end Trading on 5/3/2021 to approximately $ 65.61 per barrel at the end of the trading day on 12/3/2021.
Global supply - Saudi Arabia has raised the price of oil to be delivered in April to customers in Asia and the US. This move comes after OPEC +'s decision to continue stricter production quotas, along with the continued voluntary cut of about 1 million barrels of oil per day, April.
"The EIA (US Energy Agency) indicates an increase of about 13.8 million barrels in commercial inventory in the week ending 5/3/2021, which occurred despite the decrease in net imports. This increase brought the commercial oil inventory in the US" At 498.4 million barrels, the level is about 6% higher than the average level in this period in the last five years.
Along with global demand - US fuel demand continued to recover and rose to 8,726,000 barrels per day, the highest level since mid-November 2020, due to the return of drivers to roads with extreme weather events in the Gulf of Mexico and the central US leading to a sharp drop in demand.
Consumption of oil distillates in India fell in February by about 5% in annual terms, due to the rise in oil prices, and India consumed 17.2 million tonnes of oil in February this year compared to 18.1 million tonnes in February.
Natural Gas Economy - The price of natural gas in the US (Henry Hub) continued to fall slightly last week and reached $ 2.67 per MMBTU.
The medium-term outlook - the continued maintenance of OPEC +'s stringent production quotas, along with a continued voluntary cut in Saudi Arabia's oil production of 1 million barrels per day are expected to support high oil prices in the near term and also support a further reduction in global oil inventories.
It seems that the current price increase is priced to an extent that includes the expectation of a deficit in the oil market and also an expectation of an increase in demand during the second quarter of the year.
Dr. Gil Befman, Chief Economist of Bank Leumi (Photo: Oren Dai)
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