2023-06-05 19:52:15
Oil prices ended slightly higher on Monday, following starting with a cannonball, the effect of the announcement of a new production cut by Saudi Arabia, the only member of OPEC to reduce its volumes, dissipating in a few hours.
The price of Brent crude from the North Sea for August delivery rose 0.76%, to close at 76.71 dollars.
Its American equivalent, the West Texas Intermediate (WTI), due in July, rose 0.57% to 72.15 dollars.
Initially, Brent had taken more than 3% and WTI almost 5%, before erasing a good part of their gains at the end of the session.
Saudi Arabia announced on Sunday that it would once more contract its production from July, up to one million barrels per day.
The rest of the volumes from the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ agreement will remain unchanged until the end of 2024, the cartel announced following a meeting at OPEC headquarters. organization in Vienna.
“The (market) reaction has been much less than some expected,” commented Andy Lipow of Lipow Oil Associates.
More than supply, operators “are concerned regarding demand and its growth this year”, explained the analyst, with investors anticipating a slowdown in the global economy, which would cut off some of consumers’ appetite for ‘black gold.
“This drop in production should not translate dramatically at the pump,” said Susannah Streeter of Hargreaves Lansdown in a note.
Saudi Arabia’s decision contrasts with the fact that “we are seeing very significant exports from Russia, although it has committed (in February) to reducing its production by 500,000 barrels per day”, recalls Andy Lipow.
“The Saudis are offering market share” to other producers, primarily Russia, “and this strategy cannot work in the long term,” said Edward Moya of Oanda in a note.
In addition to market share, the Kingdom “is losing revenue despite its actions to raise the price of oil, because prices have actually fallen”, underlines Andy Lipow.
If, on the sidelines of the meeting, Saudi Arabia and Russia held a speech of unity, signs of divergence remain as to the strategy of OPEC +, between the first which makes prices a priority and the second which, subject to a cap on its prices, wants to sell as much black gold as possible.
In an interview with al-Arabyia TV, Saudi Energy Minister Abdelaziz bin Salman said he had “a discussion” with the Russians regarding their “responsibility to be clear and transparent” regarding their production and their exports.
Russia has, in fact, suspended, at the end of April, the communication of aggregated data on its oil and gas activity, until the beginning of April 2024.
“I think they realize today that not publishing this information has generated doubts regarding these figures,” said the Saudi minister.
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