Oil prices stabilize amid global economic growth

Declining inventories in the United States, coupled with escalating tensions in the Middle East, have led to higher barrel prices. In addition, optimism surrounding economic growth and expected inflation last month led to increased investment in oil exploration. This effort aims to maintain their position as major oil producers, further widening the gap between the top OPEC+ members. On the other hand, China’s growth exceeded expectations last month, reaching 5.3%, indicating a steady rate of 5% for the current year. Demand for oil is expected to exceed 500,000 barrels per day, which represents about 50% of global growth expectations. With daily oil consumption reaching about 14.5 million barrels, China is preparing to become a major customer for Arabian Gulf producers. Saudi Aramco has taken the initiative in selling crude oil and petroleum products directly, as well as building and investing in popular refineries, in recognition of China’s importance in the field of energy.

The rest of the producers have to play “catch me if you can.” The third country that must be monitored and invested in is India, where its oil consumption is about 5 million barrels. It is expected to overtake China by 2027 and become the fastest growing major economy. India is poised to be a focal point for Gulf producers, necessitating more upfront investments. It is necessary for us to focus on investing in India, especially in its oil sectors, especially in refining. The two important oil importing countries that we need to monitor and follow are India and China. Kuwait has been exporting petroleum products to India since 1971 and to China in recent years, with primarily Kuwaiti crude oil. It is necessary to maintain strong relations with these countries and secure long-term partnerships in the Kuwaiti oil and gas sector, given that this is the primary focus of our business.

Meanwhile, the US markets should be viewed as occasional spot buyers and a last resort, with the aim of keeping it that way. Today, the oil market is stable with a balance in supply and demand. It appears that there is currently more oil available in the markets than in the past, despite adherence to OPEC+ quotas. As a result, oil prices are expected to remain stable and may rise further in the coming months, especially during the winter. This could prompt OPEC+ to increase oil production, especially if prices exceed $90 per barrel.

By Kamel Al-Harami
Independent oil analyst
e-mail: [email protected]

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