Texas and Brent oil futures contracts continue last week’s downtrend and weigh on stocks.
The price of Petroleum fell this Monday for the third consecutive session since the Opec+ announced new production cutsa reaction that puts this alliance under pressure, which is running out of ammunition to support prices.
The price of Brent barrel of the North Sea for delivery in February lost 1.1% to close at US$78.03. Meanwhile, the crude West Texas Intermediate (WTI) For January it lost 1.4% to $73.04.
Since the OPEC and his allies announced the cuts on Thursday after their ministerial meeting, the WTI lost more than 6%. The alliance promised a additional reduction of 900,000 barrels per day of production from January to Marchto bring it to about 6 million per day minus the cut from October 2022, more than 5% of world production.
“Traders are a little lost but wondering about the exact extent of the cut,” he said. Michael Lynchfrom Strategic Energy & Economic Research (SEER).
The market doubts the commitments made by some members of the alliance, in particular United Arab Emirates and Kuwait, “who could not respect their quotas,” the analyst warned. Angola has already announced that it will not comply with the quota assigned to it.
“It’s getting harder and harder” for the Opec+explains Lynch, due to the progressive and constant degradation of the economic situation.
With the drop in demand, “they cut more. But the problem is that they will run out of ammunition,” the analyst argued.
While the Opec+ reduces production, USA is at an absolute record of 13.2 million barrels, which Brazil which is also at its maximum; Iran meanwhile is also at a five-year peak and Nigeria produces more and more.
For Danny Flynnfrom Price Futures Group, the perspective of a monetary politics less restrictive in the United States in the medium term, could generate some optimism in the market and help prices recover.
Source: Ambito
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