Oil prices fell further on Thursday, despite the postponement, announced by the OPEC+ alliance, of production increases from October to December, which did not convince the market. The price of a barrel of North Sea Brent for delivery in November ended close to equilibrium (-0.01%), at 72.69 dollars. The barrel of American West Texas Intermediate (WTI) with maturity in October fell by 0.07%, to 69.15 dollars.
Eight members of the cartel formed by the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ agreement have “agreed” to extend by two months the unilateral cuts they have committed to since November 2023, according to a statement released Thursday. In June, OPEC+ had initially announced that they would gradually reverse these reductions, at a rate of 180,000 barrels per day added each month starting in October.
The members thus planned to spread out the end of voluntary cuts over a year, to ultimately put 2.2 million barrels per day back on the market once the cycle is completed. By shifting this schedule by two months, the group is taking into account the recent anemia of black gold, which fell to its lowest since December, and is seeking to support prices. But this communication was not enough to sufficiently boost the market, which remained in the red.
Refinery maintenance season
“OPEC had no choice”responded John Kilduff of Again Capital. “They didn’t surprise anyone.” For the analyst, this reshuffle of the calendar may have been too timid to make a difference. “This helped to stabilize prices”concedes John Kilduff, “But let’s wait and see if that helps them. I have my doubts.” Unimpressed by the OPEC+ message, operators also paid little attention to the drop, albeit massive, in American crude stocks, which fell by 6.9 million barrels last week.
Although significant, this contraction was lower than the estimate of the professional federation API, which mentioned, on Wednesday, 7.4 million barrels. The participants mainly noted the decline in volumes of gasoline delivered to the American market (-4% over one week), considered as an implicit indicator of demand. Bad news at a time when the refinery maintenance season is beginning, synonymous with capacity reductions for several weeks. On Thursday, the wholesale price of gasoline in the United States fell to its lowest level in 16 months.
