Oil: Brent and WTI prices continue to tumble

New York (awp / afp) – Caught between a surge in production at some oil giants, sanctions on Iran less severe than expected and doubts about future demand, oil prices have continued to dive on Friday.
The price of a barrel New York WTI fell for the tenth consecutive session, from 48 cents to 60.19 dollars, recording occasionally its longest series of decline since the 1980s. It has lost more than 21% since its recent peak, October 3rd.
The price of a barrel of Brent, quoted in London, rose during the session under the bar of 70 dollars for the first time since April before recovering a little. He finished down 47 cents to 70.18 dollars.
In early October, oil prices had peaked at their highest in four years, $ 86.74 for Brent and $ 76.90 for WTI, while markets feared to see the second part of US sanctions against Tehran bring down the volume of black gold available.
Indeed, in leaving the Iranian nuclear deal, the US administration had said it wanted to lower Iranian exports to zero barrels.
But at the last moment Monday, Washington eased its message and granted exemptions to eight importers of Iranian oil, which will allow Iran to continue exporting some of its extractions.
New effort from OPEC?
In addition, the Organization of the Petroleum Exporting Countries (OPEC) and its partners, including Russia, decided in June to relax their production-limiting agreement to address investor concerns.
The United States has also opened the floodgates in recent months, with production climbing at the latest weekly figures to a record 11.6 million barrels a day. Stocks of crude oil have risen steadily over the past seven weeks.
At the same time, concerns about the strength of demand for oil are increasing.
"China's growth is starting to slow down," commented Cailin Birch, an analyst at The Economist Intelligence Unit.
"Similarly, somewhat dull quarterly results in the United States support the idea that trade tensions are weighing on US groups," she added.
"We saw the financial markets collapse in October, and there is still a small correlation with the demand for energy," said Robert Yawger of Mizuho.
In the face of plummeting prices, countries that have set production targets should consider lowering it at a follow-up meeting of the agreement, Sunday in Abu Dhabi.
Although no decision will be officially taken before the OPEC plenary meeting in December in Vienna, "it will not cost them much to say that they are thinking about reducing their extractions or that the subject will be on the table in Vienna" said Mr Yawger.
Saudi hesitations
For OPEC, it will be a question of reaffirming its role as market regulator. By joining forces with other producers, including the Russian giant, at the end of 2016, the Organization had managed to push up the prices of black gold.
But geopolitical considerations could complicate the task of OPEC. Saudi Arabia, as the world's leading exporter, is a founding member and the leading figure in the Organization.
But a think tank close to Saudi power would work on the consequences of the country's exit from the cartel, according to the Wall Street Journal.
"This illustrates a seismic shift in the oil market, the center of gravity is no longer in Ryad but Houston", Texas, heart of the US oil industry, said Olivier Jakob, an analyst at Petromatrix.
According to him, Saudi Arabia, which sees the American production of shale oil exceed that of the kingdom and undermine the power of OPEC on the market, would therefore consider a liberalization of its oil industry.
In addition, US-Saudi relations are tense. President Donald Trump had strongly criticized OPEC because of the high oil prices, and the two countries also opposed after the murder of Saudi journalist Jamal Khashoggi.
afp / rp
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