Energy consultant and former OPEC director of energy studies Dr. Faisal Al-Fayek said the year 2022 was an exciting one, especially as prices in the first half were above $100, but he closed the year with a media of $100 for Brent crude oil and $97 for West Texas crude oil.
Al-Fayek added in an interview with the Al-Arabiya channel: “Brent was at $85 at the end of the year, and is considered low, and the severe lack of liquidity in the derivatives markets is clear with the increase in dollar prices and the inverse relationship between the price of oil and the price of the dollar”.
At the end of last week’s reports; Oil prices were up about $3 at settlement in Friday’s session, posting gains for the second straight week, after Moscow said it may cut crude output in response to the maximum price imposed by the Group of Seven on Russian crude oil. Brent crude oil climbed $2.94, or 3.6%, to $83.92 a barrel. US West Texas Intermediate crude oil rose $2.07, or 2.7%, to $79.56 a barrel.
He explained that continued uncertainty is hampering the activities of traders and speculators in the oil futures markets and said, “OPEC Plus producers are expected to step up production cuts to maintain market cohesion, while it has become clear that the Fed is planning more monetary tightening”.
He pointed out that oil prices got off to a bad start in 2023 and for the first time in nearly 30 years start with unwarranted downward momentum, and he said, “Why do we need upward momentum in prices to keep investing in the source, and now supplies continue, but I can’t know how markets will fare. ” No oil supply shock.”
He stressed that despite the latest data on total oil inventories for OECD consumers in October 2022 at 167 million barrels in less than the media of the last five years and 197 million barrels in less than the media of 2015-2019, oil prices continue to move at unimaginably low levels. Expected even as US gasoline and oil inventories are at their lowest level in 5 years and US strategic storage levels are currently at 372 million barrels compared to 595 million barrels a year ago, which is the lowest level low since 1984, which raises concerns about energy security.
Al-Fayek confirmed that Brent crude oil fluctuated between $76 and $86 in it fluctuates flat, and speculators haven’t found any bets on oil for the past couple of months, and it’s now priced unfairly to derivatives prices.
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