Latest oil price trends: OPEC+ cuts fail to convince, market remains cautious

2023-11-30 20:29:17
Closing price: Oil prices ended down on Thursday, despite the announcement of new production cuts by several members of the OPEC+ alliance, received with caution by the market. The price of a barrel of Brent BRENT Brent, or North Sea crude, is a variation of crude oil serving as a benchmark in Europe, listed on the InterContinentalExchange (ICE), a stock exchange specializing in energy trading. It became the first international standard for setting oil prices. from the North Sea for delivery in January dropped 0.32%, to close at 82.83 dollars.

Le baril de West Texas Intermediate (WTI WTI West Texas Intermediate (WTI), also called Texas Light Sweet, is a variation of crude oil that serves as a standard in setting the price of crude and as a raw material for oil futures contracts with the Nymex (New York Mercantile Exchange). ), the stock exchange specializing in energy.) American with the same maturity fell further, losing 2.44%, to 75.96 dollars.

Several members of the Organization of the Petroleum Exporting Countries (OPEC) and the OPEC+ alliance committed to additional reductions on Thursday “to strengthen the stability and balance of the oil market”, according to a press release.

???????? Following a ministerial meeting, Saudi Arabia renewed, until the end of March, its reduction of one million barrels per day, in force since July. ???????? Russia has increased it from 300,000 (since September) to 500,000.

By adding six other countries, the new cuts reach 900,000 barrels per day in net.

???? Rising until then, prices nevertheless fell after the cartel’s communication.

“They have a credibility problem,” commented Stewart Glickman of CFRA. “We don’t see a united front. They haven’t managed to get everyone aligned.”

“Saudi Arabia aside, OPEC members have traditionally had difficulty complying with planned cuts, leading to skepticism about the extent of the cuts that will actually be achieved,” added Rob Haworth, of US Bank Asset Management Group.

“The market will have to evaluate the credibility of these voluntary reductions on a case-by-case basis,” according to Stewart Glickman.

Another unfavorable sign for the unity of the alliance, the representative of Angola to the OPEC board of governors, Estevao Pedro, immediately rejected the new quota assigned by the organization to his country.

The cartel set it at 1.11 million barrels per day, less than the 1.28 decided in June.

“We will produce above the quota determined by OPEC,” Estevao Pedro told the Bloomberg agency, while denying “disobeying” the alliance.

“The economic slowdown and international trade also limited the potential for price appreciation after these announcements,” underlined Rob Haworth.

“Demand has been above average, but growth is expected to be lower next year,” recalled Stewart Glickman. “A lot will depend on China’s recovery. If China disappoints, it will put OPEC+ under pressure to make further massive cuts.”

???????? More marginally, prices also suffered from the announcement of the resumption of loadings of Kazakh crude at the Russian terminal of Novorossiïsk, on the Black Sea, after a storm which hit the region.