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Oil hesitates then climbs after the monthly OPEC+ meeting

Oil hesitates then climbs after the monthly OPEC+ meeting

September 17th, 2020

(New York) Oil prices ended higher on Thursday, following an already notable surge, as investors were rather optimistic about the direction of the major exporting countries, whose ministers met by videoconference.

A barrel of North Sea Brent for November delivery finished at $43.30 in London, up 2.56 percent from Wednesday’s close.

In New York, WTI’s U.S. barrel for October was up 2.02% to $40.97.

On Wednesday, both benchmark prices were up more than 4%, driven by an unexpected drop in U.S. crude oil stocks and supply disruptions in the Gulf of Mexico caused by Hurricane Sally.

Oil prices “fluctuated during the OPEC videoconference,” Oanda analyst Edward Moya said, referring to the now monthly ministerial meeting of the Organization of the Petroleum Exporting Countries (OPEC) and their allies in OPEC+, which was held remotely and behind closed doors.

The public and introductory statements, including that of the Saudi Energy Minister, “did not at first allay fears of cheaters,” as these countries do not meet their production quotas, Moya said.

“Full compliance is not an act of charity, it is an integral part of our collective effort,” insisted Saudi Energy Minister Abdel Aziz ben Salmane, leader of the cartel.

Two bad students, Nigeria and Iraq, are regularly in the Organization’s sights and accused of exceeding the production levels assigned to them.

The prices of the two reference barrels then opted for the rise, investors believing that OPEC+ could open the door to a hardening of its action “if a second wave strikes and the situation worsens” on the black gold market, added Oanda’s analyst.

“In the current environment, the Monitoring Committee of the agreement of the main exporting countries has stressed the importance of being proactive and preventive and recommended that member countries be ready to take additional measures if necessary,” said a statement issued by OPEC.

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