"Oil Price Update: Falling Prices as Russia Rules Out OPEC+ Production Cut - Latest News and Analysis"

2023-05-25 20:00:17

Closing price: Oil prices fell sharply on Thursday, depressed by the statements of the Russian Deputy Prime Minister in charge of Energy, who ruled out a new drop in production at the end of the next meeting of the OPEC + alliance in early June .

The price per 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 has become the first international standard for setting oil prices. from the North Sea for delivery in July has lost 2,67%to close at 76,26 dollars.

As for the barrel of West Texas Intermediate (WTI WTI West Texas Intermediate (WTI), also known as Texas Light Sweet, is a variation of crude oil that serves as a standard in pricing crude oil and as a commodity for oil futures contracts with the Nymex (New York Mercantile Exchange). ), the stock exchange specializing in energy.) American of the same maturity, he sold it 3,37%To 71,83 dollars.

“I don’t think there will be any new changes (following the ministerial meeting on June 4), because decisions were taken a month ago by some countries regarding voluntary production cuts“, Deputy Prime Minister Alexander Novak told the Russian newspaper Izvestia.

The leader was referring to the announcement in early April of production cuts by eight members of the OPEC+ cartel (Organization of the Petroleum Exporting Countries and its allies of the OPEC+ agreement), to the tune of 1.16 million barrels per day .

“Our mission is not to inflate prices“, asserted Alexander Novak, “but to balance the market to preserve the interests of producers and consumers.“

Operators have been wondering for several weeks about the propensity of OPEC+ to proceed with a further contraction in its volumes, after the announcements in April had only a limited effect in supporting prices.

These statements contrast with those of the Saudi Minister of Energy, Abdelaziz bin Salman, who had hinted on Tuesday that the alliance could again reduce the flow.

“The market thinks Saudi Arabia is bluffing with this drop in production“, commented Stephen Schork, the Schork Group.

For Edward Moya, from Oanda, this communication hiccup questions the operators. “This disagreement could increase the risk that the alliance will break up“, according to the analyst.

So far, the Kingdom has maintained a close relationship with Russia despite the invasion of Ukraine.

According to data from the Kpler firm, Saudi Arabia imports millions of barrels of Russian refined products each month, to provide outlets for this producer under sanctions.

At the same time, the Saudis have recently become Europe’s leading supplier of black gold, a place hitherto occupied by Russia.

The prospect of an unchanged global supply of crude should be compared with the uncertainty about the health of demand, underlines Stephen Schork, who mentions in particular the disappointing figures from Europe, where Germany has officially entered recession. in the first trimester.