2023-05-22 10:06:58
By Le Figaro with AFP
Posted
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Oil prices were moving without a clear direction on Monday, between uncertainty over the outcome of U.S. debt ceiling talks weighing on crude, and the prospect of a potential OPEC+ supply cut. . Around 9:20 a.m. GMT, or 11:20 a.m. in Paris, a barrel of Brent from the North Sea, for delivery in July, took 0.11% to 75.66 dollars. Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in June, which is the last trading day, dropped 0.14% to 71.45 dollars. “Deadlock in US debt ceiling talks weighs heavily on oil traders’ sentimentcommented Ricardo Evangelista, analyst at ActivTrades. Joe Biden and Kevin McCarthy, the leader of the Republicans in the House of Representatives, must resume discussions on Monday following a weekend of deadlock on this file, in an attempt to avoid a dangerous default by the United States. «Most investors continue to believe in a last-minute deal…to raise the US debt ceiling“, continues the analyst. But until then,more volatility is to be expected in global oil markets, with further price declines likely as the deadline approaches in early June“, he warns.
A tightening of the market hovers however, and depends “OPEC+ delivering promised supply cuts“say CBA analysts. At the beginning of April, some members of the Organization of the Petroleum Exporting Countries and their allies (OPEC+) had indeed announced voluntary reductions in their production, making raise crude oil prices.
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An “abundant” global supply in Europe
Prices have fallen back on growing fears of a global recession and weaker demand. These reductions, which were to be implemented as early as May 2023, concern approximately 1.7 million barrels per day (bpd). Representatives of the alliance members are due to meet in Vienna in early June to decide on their next production target. On the natural gas side, the Dutch TTF futures contract, considered the European benchmark, fell slightly to 29.45 euros per megawatt hour (MWh), shortly following reaching 28.90 euros per MWh, a new low since almost two years. The global offer in Europe remainsabundant due to heavy imports of LNG (liquefied natural gas, editor’s note) from other continents“, explain the analysts of Energi Danmark. They note, however, that “supply from Norway will be reduced in the near future due to pipeline maintenance work, which might be enough to prevent the market from falling further“. In the wake of the war in Ukraine, Norway has become the main supplier of natural gas to the European continent.
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