2023-09-13 10:27:00
(BFM Bourse) – The decisions of Saudi Arabia and Russia to extend their production cuts will lead to a significant shortage of oil supply at the end of the year, warn both the International Agency of energy and OPEC.
Already at their highest since November 2022, oil prices are not about to calm down. The International Energy Agency (IEA) is indeed forecasting a “significant supply shortage” of oil over the last three months of the year, due to recent decisions by Arabia and Russia on their production of black gold.
The production cuts decided by these two countries should result in “a substantial deficit” of one million barrels per day for the members of OPEC+ (the Organization of the Petroleum Exporting Countries to which are added allied countries , like Russia, Editor’s note). The IEA also warns of an increase in the risk of volatility on the markets induced by this imbalance between supply and demand.
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“So far, the reduction in supply from OPEC+ members of more than 2.5 million barrels per day since the start of the year has been offset by higher production from other non-OPEC producing countries. “alliance, including the United States, Brazil and Iran”, also explains the IEA in its monthly report.
The contract on North Sea Brent for delivery in November rose 0.5% shortly before 12 p.m. to $92.55 per barrel, still at its highest since November 2022. The October contract on Brent WTI listed in New York advances, at the gates of 90 dollars, by 0.6% to 89.27 dollars per barrel, again reaching a high for almost a year.
A similar alert from OPEC
The prices of the two global oil benchmarks were already trending upwards after a report from the Organization of the Petroleum Exporting Countries (OPEC) which made a similar observation. OPEC estimated that in the fourth quarter, demand could exceed crude supply by 3.3 million barrels, a level not seen since 2007.
Remember that an upward movement has been taking place for several weeks, while last week, Saudi Arabia announced that it would maintain the extension of its production cuts, to the extent of one million barrels per day, for three month. Or from October to December.
Saudi Arabia’s cuts were first announced in June and took effect in July. The kingdom’s production now stands at 9 million barrels per day. For its part, Moscow has indicated that it will maintain the reduction in its oil exports by 300,000 barrels per day until the end of 2023.
According to the US Department of Energy, Saudi Arabia and Russia were the second and third largest oil producers in the world in 2022, representing a quarter of global production.
Sabrina Sadgui – ©2023 BFM Bourse
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