Oil Prices Surge as OPEC Predicts Record High Supply-Demand Gap

2023-09-12 21:25:00
Closing price: Oil prices accelerated significantly on Tuesday, after the Organization of the Petroleum Exporting Countries (OPEC) warned to expect a supply deficit in relation to global demand most seen since 2007. The price of a 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 became the first international standard for setting oil prices. from the North Sea for delivery in November gained 1.56%, to close at $92.06.

As for the barrel of West Texas Intermediate (WTI WTI West Texas Intermediate (WTI), also called Texas Light Sweet, is a variation of crude oil that serves as a standard in setting the price of crude and as a raw material for oil futures contracts with the Nymex (New York Mercantile Exchange). ), the stock exchange specializing in energy.) American, with expiry in October, it gained 1.81%, to 88.84 dollars.

During the session, the two black gold benchmarks rose to their highest level since November.

In its monthly report, released Tuesday, OPEC estimated that in the fourth quarter, demand could exceed crude supply by 3.3 million barrels, which would be a first in 16 years.

Even after the extension, promised until the end of December, of volume reductions from Saudi Arabia and Russia, the market did not expect such a deficit, commented Edward Moya of Oanda in a note.

The report “gave a boost” to prices, added Matt Smith of Kpler.

For Bill O’Grady, of Confluence Investment, the threshold of 95 dollars is not excluded for the 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 became the first international standard for setting oil prices..

“We do not see a recession coming to the United States and demand remains firm,” he argues.

Added to the OPEC figures is information from the Financial Times, according to which the International Energy Agency (IEA) now anticipates a peak in demand for fossil fuels before 2030, according to a report to be published in October, consulted by the financial daily.

“What message does this send to producers? Don’t develop any more projects,” said Bill O’Grady. “Oil will become like cigarettes”, with oil companies aware of a coming decline in their share of the energy market and who will try to “get the maximum income and profits from each sale”.

In the short term, IEA forecasts are “very price friendly”according to the analyst, because they reinforce the fear of a prolonged shortage of supply.

????️ Matt Smith anticipates a significant increase in US crude stocks in the weekly report from the US Energy Information Agency (EIA), expected on Wednesday.

For him, this will be a test for the market. “We will see if this reduces the momentum” which has been driving prices for several weeks, he explains.

Analysts are counting on an increase of around 2.5 million barrels, according to a consensus established by the Bloomberg agency, after several weeks of decline.