Oil prices dipped on Wednesday ahead of a much-anticipated meeting of OPEC+ oil exporters, which must now decide on a new strategy after returning to pre-pandemic production targets. By 09:30 GMT (11:30 am in Paris), a barrel of North Sea Brent for October delivery was down 1.24% at $99.29.
A barrel of American West Texas Intermediate (WTI) for September delivery fell 1.29% to $93.20. OPEC+ (Organization of the Petroleum Exporting Countries and its allies) countries will meet in Vienna on Wednesday to discuss their oil production strategy. “A new chapter in OPEC’s history is about to be written,” said Stephen Brennock, an analyst at PVM Energy.
The alliance, on paper, reversed in August the full volume of crude production cuts it made at the height of the covid-19 pandemic when oil demand plummeted pushing crude prices higher in the background. from the abyss. OPEC+ must now decide on a new strategy “in the post-pandemic era”, in a particularly volatile and turbulent market between geopolitical tensions and fears of recession, the analyst continues. For Stephen Brennock, the group “will be careful not to make waves.”
A maintenance or a slight increase in production is expected
Analysts expect the producer alliance to agree to maintain production or increase it slightly. A large increase would be greeted with skepticism by the market, given the group’s difficulties in meeting its already established quotas.
Away from his declarations of a “rogue” state following the murder of dissident journalist Jamal Khashoggi, Joe Biden traveled for the first time as US president to Saudi Arabia in mid-July, hoping to convince Riyadh to open up its crude gates. “How the group will respond to President Biden’s call remains to be seen,” says Han Tan, an analyst at Exinity.
Crude prices also remain under pressure “as fears of a recession in Europe and the United States increase, and China’s covid-zero policy continues to affect activity, creating a scenario that leads to a drop in crude demand.” said Ricardo Evangelista, analyst. at ActivTrades. Investors should also keep an eye out for the release of the status of US oil inventories from the US Energy Information Agency (EIA). Analysts expect a 1.5 million-barrel drop in commercial stockpiles of crude oil, but also of gasoline, according to a consensus median compiled by Bloomberg.
Source: BFM TV
