At the beginning of September, the OPEC+ countries decided to wait until the beginning of December to restart their production. The deadline is again extended by one month. Due to a lack of demand and pending the American elections, OPEC+ is playing it safe.
In September, the OPEC+ countries warned that their decision could be reviewed at any time and this is what happened, at the initiative of eight of the 22 members of the organization. Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman judged that the context was not yet conducive to reopening the floodgates.
Neither the production cuts continued from month to month, nor the conflict in the Middle East seem to have any real impact on prices. For months, macroeconomic factors have regained the upper hand after each subject of tension and kept the prices of the two American (WTI) and European (Brent) benchmarks around 70 dollars per barrel.
Also readOil prices: an underlying downward trend despite the war
Abundant supply outside OPEC+
What has prevented prices from rising for several months is the fear of not seeing demand recover sustainably in China, the leading importer of crude oil, and in the world, even if the latest report from the American Information Agency on Energy (EIA), noted last week a surge in demand in the United States, whether for gasoline, kerosene, or in industry.
On the other hand, the supply is ultimately not as restricted as what OPEC+ would like: because if the members of the oil cartel keep almost 6 million barrels/day underground so as not to flood the market, the non-member countries do not impose limits on themselves.
OPEC+ sees its weight diminish
This is particularly the case in the United States where crude oil production reached a record 13.4 million barrels per day in August. Over the months, OPEC+ has lost market share and now represents barely half of world production, hence its difficulty in guiding prices.
Waiting another month, until the end of December, to put barrels back on the market, is also a way for the oil cartel to delay until the results of the American elections: their outcome could have a significant impact on the economy, demand for oil and therefore prices, according to an analyst from Rystad Energy.
Also readOPEC+ countries fail to raise oil prices
