(New York) Oil prices ended on a mixed note Thursday, prey to the suspense surrounding the decision, expected Sunday, the Organization of the Petroleum Exporting Countries (OPEC) on its production.
The price of a barrel of Brent from the North Sea for delivery in February, which was the first day of use as a benchmark contract, eroded by 0.10%, to close at 86.88 dollars.
As for the barrel of American West Texas Intermediate (WTI), with expiry in January, it chained a fourth session of increase in a row, gaining 0.83%, to 81.22 dollars.
“Prices (of WTI) rose on hopes that China would continue to relax its anti-COVID-19 measures and the feeling that OPEC + (OPEC and partners of the OPEC agreement) will do whatever it can to support prices,” Edward Moya of Oanda said in a note.
According to China’s National Health Commission (NHC), new daily COVID-19 cases fell on Wednesday for the fourth day in a row.
Health restrictions have been eased or removed in several major cities in the country, including Shanghai, Beijing and even Canton (south) despite a record number of contaminations in the latter.
For Michael Lynch, of Strategic Energy & Economic Research, the dynamics of black gold also had its source in the statements of the president of the American central bank (Fed), Jerome Powell, who signaled on Wednesday a possible inflection of monetary policy from the Fed this month.
The prospect of a less offensive Fed makes the scenario of a soft landing for the American economy more credible, deemed “very plausible” by Jerome Powell, which would preserve oil demand and fuel prices.
The market is now looking ahead to the OPEC+ group meeting on Sunday, “which could see production maintained or a small drop”, according to Edward Moya.
“Even if they don’t reduce production, they will probably discuss possible reductions in the coming months,” commented Matt Smith of Kpler.
According to figures collected by the Bloomberg agency, OPEC+ cut production by one million barrels a day in November, half of what the cartel announced in October.
The day after the OPEC+ meeting, the European embargo on Russian crude should take effect.
Thursday evening, the 27 countries of the European Union were close to finalizing an agreement on a ceiling price for exported Russian oil, which the European Commission proposed to set at 60 dollars, according to concordant diplomatic sources.
European carriers and insurers will be able to process orders for Russian black gold placed by non-European countries, provided that the latter undertake to pay a price lower than or equal to this ceiling.
Ural, the benchmark variety for Russian crude, is currently trading around $67 a barrel.
“I don’t think it will have much effect” on the market, “because the Russians will find other customers”, announces Michael Lynch, for whom the embargo has already been “digested”, for the most part.