Geopolitical developments disrupt oil markets


The tools and means of managing the international oil markets and the plans and strategies of the producers in the past period have prevented the imposition of balance and the maximization of the economic value added to the producers first and the global economy. Secondly, no party can manage and determine the tracks that the markets must take between time and time.

He attributed the weekly energy report of Crescent Petroleum, that in light of the increasing interferences between the economies of countries and the increasing conflicts and trade and economic challenges between them, which made control and balance and continue within the ranges of fair prices in the oil markets is very difficult during the current period.

In this regard, the Crescent Weekly report says that continuing to increase production at the expense of the current surplus production capacities will increase the sensitivity of the markets towards strikes on supplies, pave the way for new levels of prices exceeding all expectations and the ability of countries to contain their side effects on economic performance, with Keep in mind that increasing production without investing in raising surplus production capacity will increase the risk and feasibility of current investments by oil producers around the world.

The margin of maneuvering in demand markets is very low, with excess capacity estimated at just 3 percent of world oil demand at present, and at a global demand level of 100 million bpd, the report said.

The report pointed out that any reduction in excess capacity due to geopolitical developments or as a result of the escalation and pace of trade sanctions, which are in a state of geographical expansion, and a decline in the possible solutions in the short term, and will cause a significant rise in prices in a very short time.

The Crescent report said that the world oil markets recorded a lot of fluctuations and fluctuations due to conflicting reports related to the index of oil stocks, which has a lot of direct effects on the performance of oil markets and prices traded in view of their correlation with indicators of demand and economic growth rates and current and projected growth rates, Taking into account that a large jump in stocks means higher demand for oil in the markets.

He added that a sudden drop signifies large unscheduled consumption levels, so both trends affect the level of production capacities available to producers and are a drain on them, as it is difficult to predict the level of stocks or the timing of their rise or fall, normal or sudden.

The outlook for global economic growth can not be estimated or forecasted due to volatility and fluctuation recorded by the US crude inventories data, which are in weekly form and with a high degree of fluctuation and fluctuation. Thus, the trend towards exploiting surplus production capacities and injecting more Of investments to strengthen in the coming period must be in line with the medium and long-term producers’ plans and strategies first, the general goals set by the working groups II, and the target growth rates of the global economy III.

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