Crude oil prices have risen over recent weeks and taken an upward trend that has brought black gold to its highest level since November 2022, which will generate unexpected additional revenues for the government as it prepares to release the finance bill.
On Tuesday, crude oil prices recorded their highest level in about 10 months, specifically since November 17, 2022, driven by rising demand, waning fears of a contraction in the Chinese economy, and the continuation of the collective reduction policy by the “OPEC+” alliance, in addition to reducing unilateral quotas by Other member countries of this bloc.
In this context, the price of North Sea Brent crude oil, which is the reference oil for Algerian oil “Sahara Blend,” reached $90.37 per barrel at around 2:30 p.m. Algeria time, an increase of 1.54 percent compared to the opening price in the morning (+ $1.37).
It is noteworthy that this level of Brent crude prices is the highest since last November 17, when it recorded $90.10 per barrel at that time.
In the same vein, US West Texas Intermediate (WTI) crude oil prices at the same time reached $87.32 per barrel, an increase of 2.07 percent (+$1.77). We must return to November 11, 2022 to notice the level of US West Texas Intermediate crude prices at the same level as Tuesday, September 5, 2022.
For its part, the British investment bank “Barclays” raised its expectations for crude oil prices in the coming year 2024, to the level of $97 per barrel of Brent crude. British Bank experts believe that the slowdown in the growth of oil supplies from outside the OPEC+ alliance, as well as the continued production cuts from the group’s countries, will lead to a rise in oil prices.
According to observers, the OPEC+ alliance’s continued policy of reducing production had an impact on the markets, given the size of the collective and unilateral reduction by the bloc at a level exceeding 1.7 million barrels per day. A few days ago, Russian Deputy Prime Minister Alexander Novak stated that his country had agreed with the OPEC partners on standards to continue reducing exports, without announcing them, which is a new confirmation of the continuation of the policy of reducing production in the coming period.
Sales of petroleum derivatives in the United States, China and other countries have also recorded a recent increase, indicating increased demand and increased consumption.
In turn, the Kingdom of Saudi Arabia decided, on Tuesday, to extend the voluntary reduction in oil production by one million barrels per day for three months until next December. With this decision, the Kingdom’s production will be approximately 9 million barrels per day during October, November and next December.
These developments would generate additional revenues for the public treasury that were not expected given the oil levels in recent months, especially as the government is preparing to discuss the draft corrective (supplementary) finance law before releasing the draft finance law for the year 2024.
According to the current barrel levels, Algeria will have earned about $20 per barrel compared to its level in the past months, which fell in intermittent periods to around $71, such as March, May, June, and July, before beginning its upward journey since August last year.
In this context, the Algerian journalist specializing in oil , gas and energy affairs in general, Saleh Soleimani, believes that the rise in crude prices in this way is due to a relative increase in demand, and another essential factor related to Saudi Arabia.
Saleh Soleimani explained in a statement to Al-Shorouk that everyone was awaiting the decision of the Kingdom of Saudi Arabia, the current largest exporter of oil, to maintain the reduction rate at one million barrels per day, for the next three months, i.e. October, November and December, which was confirmed by the Saudi Ministry of Energy on Tuesday.
Soleimani pointed out that the great agreement between Russia and Saudi Arabia to control the keys to the oil market within “OPEC +” also had an impact on prices, especially since Riyadh and Moscow are pushing towards oil prices of at least $80 per barrel, the former to finance its internal and economic development policy and its goals. The ruler, and the second to finance the remnants of war in Ukraine.
Soleimani concluded by pointing out that these data suggest that prices will remain high in the coming months.