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Brent and Texas oil prices rose after the Organization of the Petroleum Exporting Countries (OPEC+) confirmed withdrawal from the market of 1.66 million barrels per day (mdb) crude
Brent and Texas oil prices rose after the Organization of the Petroleum Exporting Countries (OPEC+) confirmed withdrawal from the market of 1.66 million barrels per day (mdb) crude oil based on “voluntary” cuts from several of its partners as of May.
The oil alliance and its partners, led by Russia, announced over the weekend a voluntary production cut of 1.16 million barrels per day. which is 1.1% of world production. Saudi Arabia will lead the cut, taking half a million barrels a day off the market.
These abbreviations have been added to Russia’s previously announced downgrade of 0.5 million barrels per day, that on April 2, he also announced an extension of the measure until the end of the year and a sharp cut of 2 million barrels per day, which a group of 23 countries formally adopted in October 2022.
In particular, the price of Texas Intermediate Oil (WTI) It was up 6.59% this Monday to close at $80.66. barrel. In turn, Brent crude for delivery in June ended in $84.93, up 6.47% than at the end of the previous session.
All “voluntary” reductions, that is, without a binding and agreed agreement within the alliance, They will apply from May until the end of 2023.
The JMMC Supervisory Committee, the internal and advisory body of OPEC+, “took note that this caution aims to support the stability of the oil market,” the alliance said in a statement.
The decision of this group, which controls about 40 percent of the world’s crude oil supply surprised in some markets where analysts said they do not expect OPEC+ to change their supply levels at that time.
“The price increases that we expect before the end of the year as a result of these voluntary cuts can trigger global inflationtriggering a more aggressive stance on interest rates by central banks around the world,” said Jorge León, vice president of Rystad Energy.
In a similar vein, CMC Markets analyst Michael Hewson pointed out that the OPEC+ measure “creates difficulties, especially for central banks”concerned about both persistent inflation and the impact that interest rates above current levels could have.
Rystad Energy estimates that if the announced measures are fully implemented, Brent can reach $100 per barrel “earlier than expected so far” and even soar to $110 a barrel this summer.
At the same time, Rystad Energy warns that in the short term, “the market could interpret the cuts as Vote of No Confidence in Recovery in Crude Oil Demandand temporarily lower prices.
(According to information from EFE)
Source: Aristegui Noticias
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