(New York) Oil prices ended in the red on Friday, weakened by the specter of too abundant a global supply, despite production cuts by the OPEC+ alliance.
The price of a barrel of Brent from the North Sea for delivery in May dropped 1.06%, to close at $82.08.
A barrel of American West Texas Intermediate (WTI) maturing in April lost 1.16% to $78.01.
For Andy Lipow, of Lipow Oil Associates, “the market is concerned about additional flows from America, while demand is slowing.”
The analyst was referring in particular to the United States, which currently produces 13.2 million barrels per day, a level close to its absolute record (13.3 million).
He also had Guyana in mind, which now extracts more than 600,000 barrels daily, whereas its production was almost zero only five years ago.
Venezuela is also on the rise, with 2023 volumes up a third compared to 2020.
At the same time, “we are starting to see information according to which (the members of OPEC “bound by commitments) did not respect the production cuts in February”, underlines Andy Lipow.
Five member countries of the Organization of the Petroleum Exporting Countries (OPEC) and three nations party to the OPEC+ agreement have promised to extend, into the second quarter, the additional production cuts agreed at the end of last year.
In total, these cuts reach 2.2 million barrels per day.
“I think OPEC will maintain these reductions in the third quarter, because they can’t do much else until demand has caught up with supply,” anticipates Andy Lipow, even if it means losing market shares.
“A small deficit linked to production cuts is better than a big loss if they flood the market,” he argues.
For Barbara Lambrecht, of Commerzbank, the monthly report from the International Energy Agency (IEA), expected next week, should nevertheless count on “a market with supply which would only be slightly higher than demand in the second quarter “.
Operators also reacted on Friday to the rise in the unemployment rate in the United States in February, “which portends a softening of demand,” according to José Torres of Interactive Brokers.