OPEC expects oil demand to rise by 6%, creating pressure to raise prices • According to current estimates, barrel prices are expected to rise by 14% • "US may benefit from oil shale"
Demand is now fragile
Photography:
AFP
The price of oil continues to rise in the world and also marks the continuation of the expected increase in its price at gas stations.
According to current expectations, he will rise this year to more than 55 dollars per barrel and may even reach 60 dollars, the price of $ 52 per barrel (WTI) today - so appreciate Dr. Gil Michael Chapman, chief economist at the Institute.
"If "Compliance data will be positive and the vaccine will prove to be effective and safe against the mutations of the virus, and as long as the dollar remains relatively weak, this will support the current level of oil prices and possibly even beyond that," Befman estimates.
Befman notes that oil supply in the first quarter of 2021 is expected to be lower than expected after a meeting of Forum 14 of OPEC + producers in December 2020. At an OPEC + meeting last week, the group agreed to ease production quotas for Russia and Kazakhstan in February-March and are allowed to increase output together. Oil at 75,000 barrels a day, but the quotas of the rest of the group remained unchanged.
Saudi Arabia has pledged to voluntarily reduce oil production by about 1 million barrels per day, to a level of 8.12 million barrels per day (a cut of about 12% of its oil production) in February-March.
This is a deeper offset than the increase in output approved for Russia and Kazakhstan.
Oil production will be renewed
Saudi Arabia's energy minister justified this decision by saying that short-term demand remained fragile, amid tightening restrictions around the world to contain the spread of the corona virus, but added that in April Saudi Arabia's oil production would rise and return to production levels.
The next meeting of the group is scheduled for March, instead of February, in which the members of the group will examine the market situation and decide on the quotas for April.
The Saudi minister added that "the oil shale industry in the US is expected to be one of the main beneficiaries of this offsetting in Saudi Arabia's oil production and the expected rise in oil prices." Befman explains that Saudi Arabia has not led to deep cuts among OPEC + members due to opposition from some members The production of the "competing oil shale industry in the United States."
Following this decision, Saudi Arabia raised oil prices for its customers in Asia and the United States in February, amid rising oil prices, following which Iraq also raised the price of oil to be supplied to its customers in Asia.
On the global demand side, the OPEC secretary said the group expects demand to rise by 5.9 million barrels per day during the year compared to 2020 - to 95.9 million.
Most of the increase is expected to be among non-OECD countries, where demand is expected to increase by 3.3 million barrels per day.
Also, the growing demand for energy in China for heating due to the unusually cold winter season, has led to a shortage of electricity in some areas of China, and in some have even begun to limit the amount of electricity for industry and commerce.
As a result, factories increased the use of generators, which led to an increase in demand for diesel, and the price of diesel rose to its highest level since April 2020.
