Crude oil prices followed for a fifth straight session on Monday, with Brent even nearing $ 80, in a durably constrained supply market and which sees the accumulation of factors of increase in demand. The North Sea Brent barrel futures contract for November delivery ended at $ 79.53, up 1.84% or $ 1.44 from Friday’s close in London .
Brent climbed to $ 79.90 in session, a level it had not hit since late October 2018. Ã ?? New York, a barrel of US WTI for same month delivery gained 1.98%, or $ 1.47, to $ 75.45. “It’s kind of the same story” as the previous sessions, commented Matt Smith, head of oil analysis for broker Kpler, with market participants remaining convinced that the supply is insufficient. Production at the Gulf of Mexico facilities is still far from full capacity, due to damage from Hurricane Ida in late August, and members of the Organization of the Producing Countries of PE Trole (Opec), as well as their allies of Opec, show self-discipline in the very gradual increase in their volumes.
The market expects, in Wednesday’s weekly post, another drop in US crude stocks, which would be the eighth in a row, for reservations that are already at their most. low level for three years. The U.S. Energy Information Agency (EIA) predicts U.S. production to increase in 2022, to about 11.7 million barrels per day (mb / d), up from 10 , 55 mb / d currently (on average over the four weeks from mid-August to mid-September). But the American offer can only be strengthened by so-called short-cycle projects, mainly for the extraction of oil from shale by hydraulic fracturing. Because “nobody (outside of OPEC) invests (currently) in conventional projects”, that is to say projects requiring significant investments and long-term profitability, explains Matt Smith.
“We are at a time when everyone is focused on getting out of oil, and where (the exploitation of) fossil fuels is demonized”, underlines the analyst. TO?? In the short term, all eyes are on the OPEC meeting next Monday. For Matt Smith, “OPEC will stay the course” and confirm its schedule to gradually increase its production, adding 400,000 barrels per day each month until September 2022, rather than altering its trajectory to relieve lessons. The analyst, like several others, thus sees the barrel of Brent exceed, on short notice, the threshold of 80 dollars. “We are in a comfortable zone for the lessons”, he argues. “It’s a good price for producers, but it’s not likely to lower demand.”
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