$ 10 a barrel of oil is not “far”!

Eurasia Group head of the Middle East and North Africa, Ayham Kamel, expected, in an interview with “Al Arabia”, that the price of a barrel of oil will reach 10 dollars if the world economy enters into a total recession in the second quarter of the year, and thus the demand for oil will deteriorate.

He said: “We are talking about a decline in demand by about 20 to 30 million barrels per day, and this will push some companies to close their wells.”

In a question about whether oil prices have reached the bottom or whether the decline will continue, he fully noted that fear is the master of the situation in the oil market, saying: “OPEC Plus cannot interfere in the market, but the law of supply and demand must find a kind of balance.”

He went back to confirm: “This will take weeks before we see oil prices amenable to force the American and Canadian oil companies to reduce their production and move the market towards a kind of balance in the third quarter of this year.”

He continued: “We have entered into a price range between 10 and 20 dollars a barrel, before there will be a restructuring of the American economic sector in terms of oil companies, and a change in their production policies for the coming months.”

Oil prices are breathing

Oil prices rose by about 10% today, Thursday, after a 3-day selling wave pushed it to its lowest level in nearly 20 years, as demand fell due to the Corona virus, and supplies increased due to a war on market shares between Russia and Saudi Arabia.

The benchmark Brent crude, which lost half its value in less than two weeks, took some breaths as investors in various financial markets assessed the impact of huge stimulus packages from central banks.

By 08:31 GMT, Brent jumped $ 2.29, or 9.2%, to $ 27.16 a barrel, after falling to $ 24.52 yesterday, the lowest level since 2003.

And US crude rose $ 3.20, or 15.7%, to 23.52 dollars a barrel, after falling by about 25% in the previous session to the lowest level in 18 years.

Temporary ascent

But analysts say the gains will likely be temporary, as declining demand due to the outbreak of the Corona virus was mixed with the collapse of an agreement on production cuts between OPEC and other producers this month.

Saudi Arabia, the largest producer in the Organization of the Petroleum Exporting Countries (OPEC), plans to continue pumping at a record level of 12.3 million bpd for several months.

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