2023-09-06 19:36:38
(New York) Oil prices rose once more on Wednesday, still supported by the prospect of an extension of the Saudi and Russian cuts, the movement being reinforced by investment funds and their algorithms.
The price of a barrel of Brent North Sea oil for November delivery rose 0.62% to close at $90.60, a new nearly 10-month high.
The barrel of American West Texas Intermediate (WTI), due in October, appreciated by 0.98%, to 87.54 dollars, also the highest since mid-November. This is the ninth positive session in a row for WTI.
The market continues to digest the concomitant announcements from Saudi Arabia and Russia, which pledged on Tuesday to deprive the market of some 1.3 million barrels per day in total, including one million for the Saudis.
This represents around 1.3% of daily global oil consumption, in a market that would see demand exceed supply without even this reduction, according to figures from the International Energy Agency (IEA).
“The market was expecting a one-month extension,” as in August and September, explains Daniel Ghali, of TD Securities, “but the extension to December was a surprise.”
“The Saudis are determined to reduce global stocks”, inflated in recent months by the use of American strategic reserves and Iranian “overproduction”, wrote, in a note, JPMorgan analysts.
Other countries, such as Venezuela and Angola, have increased their production since the beginning of the year.
So far, the production cuts announced in October and April, for a total of 3.6 million barrels per day, had not had a prolonged effect on prices.
For Daniel Ghali, this initial lack of impact was explained by “overly pessimistic demand forecasts” at the start of the year. “The market feared that China would disappoint, while activity indicators showed resilience in demand. »
But the world’s appetite for black gold has accelerated to a record high in June, according to the IEA, which expects another peak for August, giving traders confidence and favoring the ascent of the barrel.
The market is now also benefiting from a wave of purchases by investment funds, triggered by algorithms, according to Daniel Ghali.
“Technical trends on crude have improved, which is not the case on industrial or precious metals,” continued the analyst, no more than on agricultural commodities.
However, Daniel Ghali does not see the courses going much further.
“It is not in the interest of the Gulf countries to see Brent going beyond 100 dollars”, according to him, “and they have excess capacity” which can easily be mobilized to calm the surge in prices.
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