High oil inventories and fears of demand and the slowdown in the global economy are still the most important issues that constitute a criterion on oil prices And increase the oil market challenges.
The most important thing dominates the market in general is the state of uncertainty associated as we mentioned earlier with oversupply and falling of the demand that it is still continuing to dominate the direction of prices and its expectations after the year 2016, noting that the oil market today witnesses a state of tension between the producers that everyone is trying to maintain its market share.
oil prices witnessed arise on the prices after news of an informal meeting , to discuss solutions to the crisis of supply , it is to be held by members of the Organization of Petroleum Exporting Countries (OPEC) on the sidelines of an energy forum in Algeria between 26 and 28 September.
The announcement was followed by the global rise in the price of Brent blend by about 3% to $ 45.40 a barrel, as US crude has increased by a similar amount to $ 42.90.
But crude prices are declined again to $ 42 after data issued last week from the American Petroleum institute that the stocks of the United States are increased by 2.09 million barrels last week to reach 520.8 million barrels and stocks of the United States of America in Cushing, Oklahoma rose to 1.3 million barrels.
The Institute also reported that the gasoline stocks was declined by 3.9 million barrels despite the fact that expectations were referring to a decline of 1.1 million barrels.
According to OPEC data , the total of global business strategy oil inventories on the market reached 8842 million barrels at the end of 2015, with arise by 750 million barrels, compared to the same period in 2014.
The expectations of the World Bank
A lot of analyzes addressed the volatility in the oil market, but the global economy and fears of demand as well as higher volume of supply and its impact on crude prices were the strongest present in these analyzes.
Here, the World Bank sees in his report on oil prices and trends over the next five years that despite the stability of oil prices above forty dollars per barrel since the beginning of 2016 and the high expectations that prices are seeing more improvement in the coming period, particularly after prices tested the fifty dollars levels , but the ambiguity of global economic climate still controls the direction of prices and expectations of the post-2016
The Bank report was more pessimistic on raw materials prices after it confirmed that the black gold prices will not exceed the level of $ 60 per barrel until 2020.
Going back to talk about the next OPEC meeting to freeze the production, it may be a consultative meeting on mostly, Saudi Arabia, OPEC’s largest producer, had put a condition in the OPEC meeting in Doha, the need for the participation of all parties in the freeze, which was rejected by Iran, and Saudi Arabia may stick to its condition in the meeting in Algeria, so it is likely that the meeting will meet the fate of its predecessor.
Today the price of oil witness a clear fluctuations based on market factors and uncertainties about global economic growth, and despite to talk of holding an informal meeting of OPEC at the end of the next September , but the reality of the market does not refer to the possibility of taking important decisions during the meeting, noting that the market today may not be ready for the decision to freeze the production ceiling, and especially since the market today still live price war amid a state of anticipation and caution from a lack of supplies.
Rawabet Research and Strategic Studies Center