An important event for Aramco as the oil burns, does it continue? by Investing.com

Investing.com – As oil continues to climb to record highs on the impact of the latest OPEC decisions, it looks like Saudi oil giant Aramco is going through some big moments during Tuesday’s trading on …

During these times, US Texas crude is trading near its highest level in 7 years, while the benchmark Brent is trading at its highest level in 3 years and Aramco is trading at its highest level on top of that. one year.

2,000 billion

And Saudi Aramco (SE 🙂 shares rose during those trading moments today, Tuesday, to their highest level since September 19, 2020, after breaking levels of 37 rials.

Aramco stock rose more than 1.7% today, reaching levels of 37.05 riyals, as it took the lead in liquidity in the Saudi market, with trades amounting to around 0. $ 5 billion.

Aramco shares have acquired around 15% of the liquidity of the Saudi market, which has not exceeded 3.6 billion riyals until the time of writing.

The market value of Aramco shares is once again approaching the two trillion dollar barrier, as the market value has jumped to around 7.41 trillion riyals, which is equivalent to around 1.976 trillion dollars.

OPEC decisions

The OPEC + group decided yesterday to set the oil production policy unchanged during the month of November, with the continued strength of global crude demand.

It coincided with its highest level in 3 years after breaking above the $ 81 levels, while NYMEX crude surpassed its highest level since 2014.

And it is rising during those trading moments today, Tuesday, surpassing levels of $ 78.1 per barrel, up 0.5%, and current levels are the highest since October 2014.

As benchmark Brent crude is trading near its highest levels since September 2018, when it hit levels near $ 82, an increase of $ 0.6 per barrel when trading on Tuesday.

The group agreed in July to increase production by 400,000 barrels per day per month until at least April 2022 to gradually get rid of the 5.8 million barrels per day cuts currently being implemented by the group, which reduced production in 2020 when the pandemic squandered demand.

Catalysts

The Saudi oil company “Saudi Aramco” announced the prices of contracts for propane and butane for the month of October 2021.

Aramco raised the prices of the propane contracts for October 2021 to $ 800 per tonne, an increase of $ 135 per tonne from September 2021 prices.

Saudi Aramco, Air Products, ACWA Power and Air Products Qudra announced the signing of definitive agreements to finance a $ 12 billion joint venture, equivalent to 45 billion riyals.

Aramco said its participation in this joint venture is through its subsidiary, Saudi Aramco Energy Company.

Engineer Amin Al-Nasser, chairman and chief executive officer of Saudi Aramco, said the company also aims to expand its oil business to eight million barrels per day over the next five years, up from 5.5 million barrels per day. barrels per day currently.

He pointed out that the scarcity of supplies in the world had helped to increase the demand for oil by 500,000 barrels per day, as consumers switched from gas to crude oil.

Oil price

Capital Economics believes that the price increase is temporary because it suggests a gradual return of demand growth rates to normal levels, coinciding with supply growth, according to OPEC + plan to increase production. , which will put pressure on oil prices.

Markets are awaiting data from the American Petroleum Institute, which will reveal preliminary estimates of the size of US oil stocks, before it is confirmed by the US Energy Information Administration on Wednesday.

Goldman Sachs expected Brent crude to hit $ 90 a barrel by year-end, from $ 80, as the Delta version’s faster recovery in fuel demand and production damage caused by Hurricane Ida led to tight global supplies.

“Given the decline in refining operations (SE 🙂 and weak market indicators in China, we see no incentive for the OPEC + alliance to increase oil production beyond 400,000 barrels per day. currently engaged, ”JPMorgan analysts said.

“High oil prices have the potential to continue these gains, given the recovery in demand, and he sees no evidence that these gains have peaked yet,” said John Driscor, chief strategist at JTD Energy Services.

The crude market remains strong with tight supply and recovering demand in many parts of the world, said Toshitaka Tazawa, analyst at commodities trading firm Fujitomi.

The article does not express a recommendation or appointment, but rather simple monitoring of trade in the Saudi market, according to data available on trading screens, disclosures from listed companies and recommendations from research companies approved by the ‘Saudi Market Authority.