Around 5:00 p.m., a barrel of Brent from the North Sea for delivery in November lost 2.97% to 92.90 dollars
Updates prices, adds context and gas analyst
London (awp/afp) – Oil prices fell on Tuesday following the meeting of the Organization of Petroleum Exporting Countries (OPEC+), losing part of the gains generated by speculation and then the group’s decision to lower their total production target .
Around 3:00 p.m. GMT (5:00 p.m. CET), a barrel of Brent from the North Sea for delivery in November lost 2.97% to 92.90 dollars.
A barrel of US West Texas Intermediate (WTI) for October delivery fell 0.07% to 86.81 dollars.
“There was no close for WTI on Monday due to the Labor Day holiday in the United States,” so the price decline is less steep compared to Friday’s close, says Victoria Scholar , analyst at Interactive Investor.
Brent is moving in the sharpest decline “following recording decent gains at the start of the week” following the announcement of OPEC + on Monday, specifies Craig Erlam.
The OPEC+ countries (the Organization of the Petroleum Exporting Countries and their allies) have decided to cut production, a first since the drastic cuts made due to the Covid-19 pandemic and the collapse in demand .
A decision taken “despite calls from Western governments who are fighting to contain inflation in the midst of a growing energy crisis around the world”, recalls Lukman Otunuga, from FXTM.
For the analyst, this “small cut” in the production objectives of the alliance is “symbolic”, sending the message to the West “that OPEC+ will defend crude prices if necessary”.
Washington said on Monday that energy supply should “match demand,” bluntly speaking out once morest the alliance’s decision.
Natural gas meanwhile fell on Tuesday, losing around 6%. The Dutch TTF futures contract, the benchmark for the European market, was trading at 230.135 euros per megawatt hour (MWh).
“The recent price increases were caused by a perfect storm of falling Russian gas supplies, nuclear blackouts, low hydroelectric production and disruptions in coal supplies due to drought,” summarizes Carlos Torres Diaz, of Rystad Energy.
At the same time, gas prices were held back by the state of European gas stocks, which are filling up faster than expected.
But despite its sharp correction since the end of August, the price of gas remains more than three times higher than its level at the start of the year.
Rystad Energy also estimates that “the gas crisis in Europe will hit hard in the first quarter of 2023, as storage levels drop to zero”. The “severity” of the crisis will depend on “imports of liquid natural gas and weather forecasts”, specifies Wei Xiong, analyst.
For its part, Russia “torch gas” at a loss because “its tanks are full”, lamented Tuesday the European Commissioner for Energy, Kadri Simson.
