Oil markets faced in the past period several global transformations which impacted directly on oil prices, as it ranged between ups and downs, Political factors were present, along with the technical and economic factors and uncertainties in the ability of the Organization of Petroleum Exporting countries ( OPEC) to implement an output cut agreement.
A few days ago , the international arena witnessed the win of Republican presidential candidate Donald Trump for the presidency of the United States of America, it was a sudden event not only to the American voters, but observers in all the world, and we noticed response of the markets on it, whether oil prices or stock markets and the major stock exchanges of the world .
In a new report of the Organization of Petroleum Exporting countries (OPEC) revealed that the production of oil increased in October to record levels despite the cascading appeals from some members of the organization to cut production to improve prices, according to the report of the organization , the supplies came from the member states that hopes to exempt it from any efforts made by Organization to curb supplies, such as Libya , Iraq, Iran, Nigeria and others, referring to the surplus , the largest in world’ market in the next year .
The report said Iran had told OPEC that it pumped 3.92 million bpd in October , while the secondary sources estimated the output at 3.69 million barrels per day. And Iran see if they participated in the OPEC agreement to cut supplies , it would be best suited for her to cut production from the top level.
Oil prices have witnessed a decline in Asian markets, with the return of concerns about oversupply in the world, and the US Department of Energy announced last week that the weekly trade precautions for US crude rose by 2.4 million barrels, suggesting weak demand in the first consumer in the world.
The report of the organization pointed out that it pumped 33.64 million barrels a day last month, according to data compiled by the organization from secondary sources, up 240 thousand barrels per day from September, which means a glut in supply and of course the price direction will not be in this direction, but the price index may drop below the 50 dollars at this period at least.
The International Energy Agency also revealed about the challenges facing the Organization in its efforts to restrict production. Oil has fallen below $ 46 a barrel from near $ 54 level which hit it after the announcement of the OPEC agreement directly in the September.
The Energy Agency on the late of the last week announced that the oversupply could last until 2017 if OPEC does not cut production, while increasing the production of other exporting countries may lead to a supply growth without stopping.
In its monthly report about oil market , the agency said that global supply increased eight hundred thousand barrels a day in October to 97.8 million barrels a day led to a record OPEC production, and the rise of production of countries outside the organization, such as Russia, Brazil, Canada and Kazakhstan.
OPEC’s report did not address the sudden win of the Republican Donald Trump in the US presidential election, saying only that the currency markets witnessed ” big ” volatility . And it has kept its outlook on the US and global economic growth in 2017 unchanged.
OPEC said in the report “data to be released over the coming months will provide a clearer picture of which would contribute to a more detailed look at the US economic situation, especially after the recent elections.”
And the report of OPEC says that the supply growth in October, due mostly to Libya, Nigeria and Iraq, the Member States seeking to exempt from any reduction due to the conflict .and the production of Iran also increased , which is also seeking exemption due to lower output due to Western sanctions .
The new report of OPEC is the latest reports that show the arrival of new production to record levels. According to a review conducted by the Reuters to the previous OPEC ‘ reports that the production of the organization in October was the highest since 2008 at least.
In the report, OPEC cut its forecast for supplies of the supply from outside this year, but supply growth estimated in 2017 at 230 thousand barrels per day with little change from the previous month.
OPEC expects in its report that the average of demand for its crude in 2017 up to 32.69 million barrels per day, indicating that the average of surplus in the market will reach 950 thousand barrels per day if OPEC continues of output at the same level . A report last month points to a surplus of 800 thousand barrels per day. The International Energy Agency has implicitly indicated in its latest report, released on Thursday to the surplus nearly 500 thousand barrels per day in 2017.
It is scheduled for OPEC member countries and countries outside the Organization to meet in Vienna at the end of November for understanding about the size of what will be produced by every member of the fourteen members of the Organization, in addition to many issues related to production.
The lack of consensus within OPEC is considered as one of the main obstacles to any opportunity to restore balance to the markets, where some member states insists not to curb production and other nations see it can not be cut the production because they are in special situations and other reasons, therefore, it does not seem to this reality any chance for a real agreement in addition to the absence of the pledge to freeze levels of oil production by non-members, Add to this that what is happening within the organization could complicate any agreement with non-member states where it was agreed in Algeria to leave the question of identification of the details of reducing the Member States’ shares to the meeting of the thirtieth of November at the organization’s headquarters in Vienna. And until the next OPEC meeting in Vienna , it may not carry new thing for the markets. Today, a lot of shifts may face markets especially with the arrival of the new controversial American president to the presidency of the White House.
Rawabet Research and Strategic Studies Center