Crude oil prices fell significantly this week, as the price of benchmark oil contracts fell to their lowest levels in more than two and a half weeks. This is despite the voluntary cuts announced by OPEC members and allies (OPEC+) last Thursday.
In terms of current trading, Brent crude spot contracts fell 1.36% to $78.17 a barrel. US West Texas Intermediate crude spot prices also fell 1.26% to $73.44 a barrel. This is the lowest level recorded by the two contracts since November 17.
At the beginning of trading, oil contracts rose slightly during the Asian period, but quickly erased those profits and recorded clear losses during the trading session. There were concerns about the increase in global oil supply and doubts about the adequacy of the recent voluntary cuts announced by some OPEC+ members. This situation has only had a negative impact on investor sentiment, especially after Brazil’s decision to increase its oil production to 3.8 million barrels per day.
Oil markets are experiencing significant volatility at the moment, as the market is affected by many contradictory factors. Despite the voluntary cuts announced, increased global supply and uncertainty about the sustainability of the cuts are raising concerns among investors. Volatility in oil prices is expected to continue in the coming period, and investors should carefully follow developments and make appropriate decisions based on careful market analysis.
Oil Market: Analysis of Price Movements and Future Outlook
Crude oil prices saw a weekly decline of more than 2%, as a result of doubts raised by investors about the size of the supply cuts announced by OPEC+ members at their last meeting. These voluntary cuts amounted to about one million barrels per day an additional one, raising doubts about the extent to which producers are fully complying with them, as well as uncertainty surrounding how these cuts will be measured.
The growing pessimistic outlook on potential oil demand came as a result of negative manufacturing PMI data in the United States, the world’s largest oil consumer. The data came as another blow to oil prices after negative data from the China Association for Logistics and Procurement in China’s manufacturing sector, the second-largest oil importer after the European Union.
The White House said it was ready to implement a temporary halt to sanctions on OPEC member Venezuela and ease restrictions on its oil exports in the coming days, provided that progress is made in the release of Venezuelan and American political prisoners. India, the world’s third-largest oil importer, has resumed purchases of Venezuelan oil.
According to US energy services firm Baker Hughes, the number of oil rigs operating in the US increased by 5 in the past week, bringing the total to 505. This is the highest level for US oil refineries since September, reflecting increased production in the US, although US oil inventories continued to rise over the previous six weeks.
A Saudi pipe company signs a contract with Aramco.
East Pipes Integrated Industrial Company (EPIC) announced that it has been awarded a SAR 153 million contract from Saudi oil giant Aramco to manufacture and supply steel pipes for core projects within Saudi Arabia.
In a related context, the company said that its contract with Saudi Aramco will expire completely within a period of approximately 8 months, adding that it expects the financial impact of the contract to be reflected in its financial statements during the first half of the fiscal year 2025/2024.
Her contract with Aramco followed winning a major contract from Aramco worth 1.8 billion Saudi riyals last May, and her last contract with Aramco last month was worth 440 million Saudi riyals.
Established in 2010 in Dammam within the Eastern Province, Integrated East Pipes Company (TADAWUL:1321) is today a major manufacturer of spiral steel pipes and currently offers welded spiral pipes for use in transportation, water, oil and other sectors.
Saudi Minister Expects Global Petrochemical Demand to Grow
Saudi Energy Minister Prince Abdulaziz bin Salman said on the sidelines of the seventeenth annual GPCA Forum, which kicked off on Sunday, that global demand for petrochemicals will continue to record rapid growth, so speakers on the energy transition must accept the reality of today and the future.
In this context, the minister stressed that the rapid growth in the petrochemical sector will necessarily reflect on the volume of demand for hydrocarbons as raw materials, noting that he expects the global petrochemical sector to grow by more than 50% to about 1.2 trillion tons annually by 2040.
Also, the Saudi energy minister pointed out that petrochemicals and their derivatives constitute about 50% of automotive components, including electric cars.
The seventeenth annual GPCA Forum kicked off on Sunday and explores the role of the chemical industry in sustainability and the transition to clean energy.
In short, the supply cuts announced by OPEC+ members and the failure of producers to fully comply with them, as well as pessimistic expectations regarding potential demand and an increase in the number of US oil refineries, and trade tensions in the Middle East, are some of the factors that are currently affecting the movement of the oil market.
The analysis of these factors and their development plays an important role in understanding oil price movements and making future decisions in this dynamic market.
