Energy consultant Dr. Faisal Al-Fayek said oil prices, after yesterday’s sharp drop, quickly recovered today, Tuesday, and the drop was linked to Wall Street Journal reports, in an attempt to make pressure OPEC + allianceThat’s the role Reuters played in the latest “OPEC+” meeting, and Saudi Energy Minister Prince Abdulaziz bin Salman responded at the time.
The Wall Street Journal had reported that the “OPEC +” meeting on December 4 will discuss increasing production up to 500,000 barrels per day.
Dr. Faisal Al-Fayek added in an interview with “Al-Arabiya” that pressure on “OPEC +” before each meeting is very likely, but the conflict in the markets gives the “OPEC +” alliance a great opportunity to deepen the cut in production, which currently stands at two million barrels per day.
He explained that this possibility comes with the support of the large sell-off in commodity markets, including cryptocurrencies, which has hit financial markets, especially in Asia, while the steady increase in oil demand, if it comes, would come from China .
The energy consultant said the average refining capacity of Chinese refineries rose last September to 14 million bpd in a bid to climb to last year’s average of 17 million bpd.
He added that there is an important factor affecting the capacity of China’s refineries is the demand for diesel, which achieves very high profit margins, and currently there is shortage and shortage of diesel in Asia and Europe, and also in the United States. United there is a shortage of diesel and will not be able to satisfy Russian diesel.
Al-Fayek explained that, in light of these data, a ceiling for Russian oil prices is not expected to materialize on the ground, especially with the onset of winter.
The energy consultant said he did not expect the Russian oil price cap to be enforced next January, as it represents peak winter demand for diesel, including heating oils that go into the diesel refining system.
Dr. Faisal Al-Fayek added that Brent crude oil did not break below the $80 barrier since the end of January this year until the last week of last September, and thus the news published in the “Wall Street” newspaper represents pressure on the decision of the “OPEC +” alliance.
Al-Fayek said that the ministerial decision of the “OPEC +” alliance is unanimous and that there is currently no dialogue between producers.
The energy consultant expected the “OPEC+” alliance not to get carried away with China’s shutdowns, which change on a weekly basis and disrupt the market, but he will not affect the alliance at its next meeting, and is expected to elaborate on the production cut by one million to two million barrels per day, for which the total reduction will be 3-4 million barrels, so the “OPEC +” system will be able to recover the cards played in recent months.
