(New York) Oil prices rose further on Thursday, the day after the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC+ agreement announced a sharp production cut. US President Joe Biden intends to compensate, without however convincing.
Posted at 3:57 p.m.
The price of a barrel of Brent from the North Sea for delivery in December gained 1.12%, to close at 94.42 dollars, the highest in a month.
As for the barrel of American West Texas Intermediate (WTI), with maturity in November, it took 0.78%, to 88.45 dollars.
“It is becoming difficult to bet on the fall in crude prices,” commented in a note, Edward Moya, of Oanda, for whom the decision of the OPEC + group “reshuffled the cards on the oil market”.
The cartel has decided to cut its production by two million barrels a day from November, out of a total of just over 43 million currently, and to space out its meetings every two months, against a monthly rhythm until here. This means that the quota cannot be revised before the beginning of December, for January.
Analysts agree on the fact that the two million barrels announced will translate into a much smaller effective drop, of the order of 1.2 million barrels per day, according to the firm Rystad Energy.
Several members of the group, in particular Russia, Nigeria, Angola and Kazakhstan, are already well below their quota, due to lack of sufficient capacity.
However, Goldman Sachs analysts now see the price of Brent soar to 110 dollars a barrel by the end of the year, against 100 dollars so far.
“Even at 60% of the announced reduction target, these cuts would lead to a use of reserves likely to drive up prices”, warns Jorge Leon, of Rystad, in a note, which announces a Brent at 100 dollars at the end of December, rather than the $89 expected so far.
“We are studying the possibilities at our disposal” to compensate for this reduction and avoid a new surge in prices, US President Joe Biden said on Thursday, describing these options as “many”.
The US government has already announced the marketing, in November, of ten million barrels drawn from strategic reserves, whereas it had so far committed to ending this program at the end of October, after having pumped more than 200 million barrels.
“Lately, strategic reserves have been used to balance the oil market,” says Michael Lynch of Strategic Energy & Economic Research. “To achieve this, they must not go much lower than their current level, because otherwise the effect begins to disappear. »
According to the Wall Street Journal, the American government would also consider lifting certain sanctions targeting Venezuela, to allow the American Chevron, the main foreign operator in the country, to resume its exports.
Another initiative mentioned by the White House, the temporary suspension of exports to relieve the American market and calm gasoline prices.
“It would send the following message to the rest of the world: we are in charge, not OPEC”, anticipated Mark Waggoner, of Excel Futures.
“It’s not realistic,” said Michael Lynch, for whom Joe Biden’s reaction is akin to “political posturing”.