The Cartel Opep + decided, Wednesday, October 5, to reduce its daily production by 2 million barrels.
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We do not know what to retain in priority from the joint decision of Saudi Arabia and Russia, Wednesday October 5, to vigorously tighten the oil valves: an economic measure which will support the courses of ‘black gold and lead to an increase in the price of fuels; Or the cordial agreement displayed by the Wahhabi kingdom and the Vladimir Putin regime to the beard of Western countries, and especially of the United States, which ask in vain from the countries of the Arab-Persian Gulf to pump more?
gathered at the headquarters of the Organization of Petroleum Exporting Countries (OPEC), in Vienna, for the first time since the start of the Pandemic of Covid-19 in March 2020, the thirteen members of the Cartel and their ten partners, Grouped within OPEC +, have decided to reduce their daily production by 2 million barrels (2 % of global demand), the highest drop decided since April 2020. They had then withdrawn 10 million barrels per day from Market after the collapse of consumption – and courses – linked to global confinement decreed at the start of the pandemic.
The producing countries are concerned about the decrease trend in prices since early June, where the barrel was worth 125 dollars (126 euros), after reaching 140 dollars at the start of the war in Ukraine. They fear being taken short by a recession at the end of 2022-early 2023, fueled by the rise in interest rates and by the vigor of the dollar. OPEC’s monthly bulletin, mid-September, underlined these macroeconomic risks, without being alarmist on the world situation. The OPEC is today “prices around 90 dollars,” said Nigerian Minister of Petroleum, Timipre Sylva, after the meeting.
a rebuff for Washington
At a time when the energy ministers met in Vienna, the Brent of the North Sea was exchanged at 91 dollars and the West Texas Intermediate (WTI) at 86 dollars. The markets had anticipated, at the beginning of the week, a decrease of 500,000 to 1 million barrels, and the courses did not fly to the announcement of OPEC +: Brent for delivery in December closed at 93 , 37 (+ 1.70 %) in London, WTI, at 87.76 dollars (+ 1.43 %) in New York. “The price increase will be limited,” said Jorge Leon, vice-president of Rystad Energy, in a note published by the Norwegian specialized firm on Wednesday, shortly before the OPEC +announcement.
The expert advances three reasons. The decline cannot be fully implemented, the cartel already producing 3.5 million barrels less than its official ceiling. In addition, Saudi Arabia, the United Arab Emirates and Kuwait are alone capable of carrying this effort. Finally, the market should be in surplus in the fourth quarter, thanks to American production at its highest level since the end of 2019. Rystad Energy calculated that a displayed decrease of 1.5 million barrels per day (and a real drop in Almost a million) would push the barrel to almost $ 100.
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