WTI Brent oil falls more than 3% awaiting the OPEC+ meeting | Finance | Economy
Oil prices continued to decline on Thursday on fears of recession and anticovid restrictions in China, pending the meeting of OPEC+ exporting countries.
(Ocampo questioned the oil sector and requested more contributions from the country).
A barrel of North Sea Brent for November delivery, on its first day as a benchmark contract, closed in London down 3.42% at $92.36. In New York, West Texas Intermediate (WTI) for October delivery fell 3.19% to $86.69 a barrel.
The two global crude benchmarks saw their third straight monthly decline in August on a gloomy economic outlook. Many major central banks “continue to aggressively tighten monetary policy and new Covid outbreaks in the major Chinese cities of Shenzhen, Guangzhou and Dalian have put millions of people under strict lockdown,” summed up John Plassard, an analyst at Mirabaud.
(The price of Brent continues to fall and does not exceed 100 dollars).
“China is the main question mark for the crude demand outlook and it seems that a reopening remains elusive.“, commented Edward Moya, from Oanda. Chinese manufacturing activity collapsed in August, weighed down by anticovid restrictions and an unprecedented heat wave that caused electricity cuts, according to an independent index released this Thursday.
“Describing the market trend as violent, volatile or uncertain has become a cliché, but it is no less accurate for that,” stressed Tamas Varga, from PVM Energy, pointing out that opposing forces have been facing each other for weeks in the oil market .
Meanwhile, investors await Monday’s meeting of members of the Organization of Oil Exporting Countries and their allies (OPEC+) to decide its production policy. Markets will be closed on Monday in the United States for Labor Day.
“The Saudi Energy Minister said that the cartel could reduce production if Iran concludes a nuclear agreement with the West and restores its exports,” Plassard recalled, since the return of the pact would mean the lifting of certain sanctions against Tehran.
(The millionaire embezzlement denounced in Venezuela through PDVSA).
The drop in crude oil prices occurs in a context of a rising dollar and a sharp drop in the New York Stock Exchange. “If September turns out to be a bloodbath on Wall Street, oil prices could drop to around $80,” Moya warned.
In the natural gas market, the Dutch TTF futures contract, a European benchmark, was trading at 250 euros per megawatt hour (MWh), rising again at the end of the session after the interruption of Russian deliveries through the Nord Stream gas pipeline.
“If the Russian Nord Stream flow resumes at the current level after the three-day hold in September, Europe could get through this winter and next without a reduction in demand,” said Massimo Di Odoardo, an analyst at Wood Mackenzie.