(New York) Oil prices recovered on Friday after their sharp fall the day before, with the market’s attention now focused on OPEC, which meets next week and which could intervene to halt the fall in prices.
A barrel of Brent from the North Sea for delivery in January gained 4.12% to 80.61 dollars, returning above the 80 dollar mark.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in December, jumped 4.10% to $75.89.
The day before, the two global benchmarks had plummeted, both falling to their lowest levels since the beginning of July, at $76.60 per barrel for Brent, and $72.16 per barrel for WTI.
“On Thursday we saw sales accelerate when we broke the floor of 78 dollars per barrel” for Brent, Andy Lipow of Lipow Oil Associates commented to AFP.
“Today we saw some hedging as prices fell to a very low level,” the analyst added.
Market attention is now focused on OPEC (Organization of the Petroleum Exporting Countries and their allies), whose intervention is becoming increasingly likely as prices fall, analysts say.
“This pushes the market to think that OPEC, while maintaining its voluntary production cuts, could start to think about additional reductions in order to support prices,” explained Andy Lipow.
“OPEC will have to move up a gear and give solid indications on what it intends to do in 2024,” also affirmed Bjarne Schieldrop, analyst at Seb interviewed by AFP.
For the analyst, the question arises whether “Saudi Arabia must bear the burden alone [with only a little help from Russia]” by further reducing its production, or whether “it could require certain others members of OPEC that they join with it to regulate the market”.
The next ministerial meeting of OPEC members is scheduled for November 26 in Vienna, headquarters of the alliance.
“So far, it has been mainly Saudi Arabia, with a little help from Russia, that has proactively managed the oil market and the price of oil by making significant reductions,” recalls Mr. Schieldrop.
In April, the kingdom was still producing 10.5 million barrels per day, before reducing to 9 million barrels per day, which remains its current production level. Its typical production is around 10 million barrels per day, according to Seb.
