Low US crude oil inventories, and a continued rise in prices 2021-01-13T15:33:44 Low US crude oil inventories, and a continued rise in prices Low US crude oil inventories: The American Petroleum Institute (API) announced yesterday, Tuesday, January 12, 2021, that crude oil inventories declined by 5.821 million barrels of crude oil in US crude oil inventories for the week ending on January 8th. Analysts expected a decline of 2.266 million barrels from inventory this week. This ending week on the 1st of January, The American Petroleum Institute (API) announced that crude oil inventories have declined by 1.663 million barrels after the analysts have expected a decline by 1.271 million barrels, while the US Energy Information Administration (EIA) recorded a decline of 8.0 million barrels. As for the ending week on the 8th of January, The American Petroleum Institute (API) announced that crude oil inventories have declined by 1.876 million barrels – compared to an increase in the last week, which is 5,473 million barrels. Analysts had expected an increase of 2.695 million barrels this week. Fluctuations in oil prices for the week Oil prices rose on Tuesday before the release of data based on supply and demand, and it happened as a result of the voluntary initiative made by Saudi Arabia last week to reduce its oil production by one million barrels a day in February and March. West Texas Intermediate (WTI) crude for February delivery rose (96%) to settle at $ 53.21 a barrel on the New York Mercantile Exchange. Brent crude, for March delivery, rose 92 cents to settle at $ 56.58 a barrel on the ICE Futures Exchange. An hour before the release of Tuesday’s data, (WTI) rose by $ 0.90 on the day (+ 1.72%) to $ 53.14, up more than $ 3 a barrel over the course of the week. The benchmark Brent crude oil index rose $ 0.89 at the time (+ 1.60%) to $ 56.55 – to an increase of nearly $ 3 a barrel over the course of the week. Oil prices have now reached their best level in the last 11 months, but continuing with closures as a precautionary measure to limit the spread of the Coronavirus, weakens demand for oil, decreasing the gains in oil prices. At 4:34 PM according to EDT, the index of WTI was being traded at $ 53.16, while Brent crude was being traded at $ 56.56. The rates of weekly oil production According to the recent data which Energy information Administration has provided, the production of US crude oil has reached 11 million barrels a day for the fourth week respectively. The production is less by millions of barrels than the highest level reaching 13.1 million barrels a day in March 2020. Distillate inventories increased by 4.433 million barrels in the week, compared to last week’s increase of 7.136 million barrels, and Cushing inventories decreased this week by 232,000 barrels. Iran’s new conditions to work with the foreign Oil companies The Iranian Oil Minister, Bijan Namdar Zangeneh, stated that “foreign energy companies and contractors have to accept the new Iranian terms and conditions if they return to work in the country.” An Iranian news agency quoted the very minister as saying last week, “If foreign companies come to Iran, we will cooperate with them, but this does not mean that we will abandon what we have achieved.” At the same time, foreign oil companies and contractors are not enthusiastic about working with Iran in particular, given the current sanctions on Iran’s oil industry and its exports. The Former US President Donald Trump had withdrawn from the nuclear deal in 2018, imposing sanctions on Iran from the oil, shipping, and banking industries, threatening sanctions against anyone doing business with Iran. Major foreign companies, like the French oil company Total, hastened to withdraw from energy projects in Iran owing to potential US sanctions for doing business with Islamic countries. But the recent President, Joe Biden, has pledged to offer Iran a route to return to diplomacy and return to the nuclear deal. If the United States and Iran return to the diplomatic path, there will be an opportunity to ease the strict US sanctions on Iranian oil exports, which could pave the way for about 2 million barrels a day of Iranian crude oil exports to the market. Last month, Iran stated its ability to sell what reaches 2.3 million barrels a day of oil started with the Iranian year which begins in March 2021, according to the Iranian budget law project. For the last week, Iran asked The US for paying Tehran what reached $ 70 billion as compensation for the missing oil revenues owing to the US sanctions, as the main condition to return the nuclear deal. The outcomes of the Saudi initiative at the OPEC meeting “The past 10 weeks of trading have seen one weekly decline, which was relatively small,” said Carsten Fritsch, an analyst at Commerzbank AG. “This is evidence of the strength of the oil market in the last two and a half months.” In the last week, after the OPEC meeting, the Kingdom of Saudi Arabia announced a reduction of 1 million barrels of its daily crude oil production quota for the next two months, February and March. This has led to refineries, in Asia, struggling to secure supplies from Europe, with North Sea shipments being bought in one day. The Saudi move has supported oil prices throughout the week, but the lack of supplies from the world’s largest oil exporter has overturned the plans of Asian oil buyers upside down. The Saudis also raised the official oil selling prices (OSPs) for Asia for the month of February, which raised the price of Arab Light Oil by $ 0.70 per barrel to $ 1.0 per barrel against the Middle East index, the Oman / Dubai average. North Sea shipments have benefited from the reduction in Saudi production, and Asian refineries have been obliged to obtain oil from elsewhere, as a result of the rise in prices from the Kingdom. According to Reuters, one or two shipments of 600,000 barrels of crude are traded on a normal day under normal conditions. But last week, seven shipments of crude oil from the North Sea were bought and sold in Thursday’s trading, and this was, according to the oil trade source, a daily record for North Sea shipments traded in a single day in recent history. The number of rigs continued to rise for the seventh week respectively Baker Hughes Company said that the number of oil and gas platforms in the United States increased by 9 to 360. Also, The number of oil rigs increased by 8 this week. Total US oil and gas platforms have now decreased by 421 compared to this time last year. The number of rigs in Canada increased by 58. Oil and gas rigs in Canada are now at 117 and are being reduced by 86 on an annual basis. For the Permian Basin, the number of rigs increased by 4 this week, bringing the total of active rigs in the Permian to 179: 218 less than this time last year.