The price of oil has ended lower this Monday as investors digesting the agreement of the Opec+ providing for an extension of the reduction of the production of several oil giants on Saturday and the announcement made by Riyadh in the end of its cuts to voluntary additional.
read also : crude Oil: Opec+ extends, in July, its drastic cuts of production
London a barrel of Brent North sea for delivery in August was down 1.50, or 3.5%, to finish at 40,80 usd. In New York, the barrel american WTI for the month of July was down $ 1.36, or 3.4%, to close at 38,19 dollars. The u.s. reference has yet crossed in the course of the asian session the bar of 40 dollars, a first since 6 march. The members of the Organization of petroleum exporting countries (Opec) and its allies, including Russia, agreed Saturday to extend in July the reduction in production history to which they compel themselves, since the 1st of may.
in the Face of the sudden drop in demand and price of crude, the cartel members and their partners were engaged on April 12, a reduction in historical production of 9.7 million barrels per day (mbd) for the months of may and June, which was to pass to 7.7 mbd, effective 1 July. It will finally be 9.6 mbd for the month of July, the slight difference is explained by the position of Mexico, which refuses to bow to the group effort.
“Nearly 9 million barrels per day have been withdrawn from the market, it is a very high figure,” emphasised the minister of Energy, Russian Alexander Novak, quoted by the Russian news agency Ria Novosti. “We are monitoring the situation carefully with the recovery of demand in the air transport and automotive industries. The situation that will develop in July-August will depend in large part”, he added.
cuts voluntary but temporary
“The agreement of the Opec+ as such was expected and already built into the price Friday” has, however, noticed Bjornar Tonhaugen, a specialist in oil market for the firm Rystad Energy. “What the brokers did not expect, however, is the fact that saudi Arabia, the united arab Emirates and Kuwait decided to stop in July the cuts voluntary extra that they were imposed in addition to the cuts within the agreement Opec+”, he noted. The saudi minister of Energy, the prince Abdelaziz bin Salman, said Monday at a press conference post meeting of the Opec+ the cuts voluntary granted by his country, along with Kuwait and the united arab Emirates, were “for a month” and would thus come to an end.
read also : Libya: resumption of production at two oil fields
in addition, the national oil Company (NOC) announced on Sunday the resumption of production on one of the most important oil fields of Libya, blocked since January by the allied forces to marshal Khalifa Haftar, strong man of the eastern part of the country. Even if she was found Monday, a “welcome” by the algerian minister of Energy Mohamed Arkab, which also ensures the rotating presidency of the Opec, it “could pose considerable challenges to the leaders” of the cartel, has found Helima Croft, of BNP.
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