(LONDON) Oil prices continued to rise on Friday, benefiting from investors’ risk appetite ahead of a much-anticipated OPEC meeting, when gas resumed its slide as fears over Norwegian supply receded. .
Around 5:40 a.m. EST, a barrel of Brent North Sea crude for August delivery was up 1.35% at $75.28.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in July, gained 1.37% to 71.06 dollars.
“Oil prices have started the month of June with a bang,” commented Han Tan of Exinity, a few days before the meeting of OPEC producing countries.
After weeks of heated negotiations, the United States suspended its debt ceiling on Thursday by a vote of the United States Congress, “removing the threat of a catastrophic default”, said Stephen Brennock, analyst at PVM Energy.
Enough to boost the risk appetite of investors, who had moved away from crude considered as a risky asset, less efficient in times of economic uncertainty.
At the same time, the members of the Organization of the Petroleum Exporting Countries (OPEC) are meeting physically in Vienna, the headquarters of the alliance, for the second time since March 2020, to possibly adjust their level of crude production.
While markets expect the group to maintain the status quo at its Sunday meeting, the fact that Brent still remains “well below $80 a barrel ensures that deeper production cuts from OPEC “remain on the agenda,” says Tan.
Voluntary cuts by some members announced in early April to the surprise of the market had briefly boosted prices, which then fell as fears of recession gained ground.
The same scenario is expected: a further production cut could send prices “skyrocketing” “while a dovish decision would leave oil stalling under the weight of demand fears,” Han said. Tan.
On the natural gas side, the Dutch TTF futures contract, considered the European benchmark, remained stable at 23,545 euros per megawatt hour (MWh), shortly after reaching 22,855 euros per MWh, a new low for almost two years. .
“The gas leak in Norway, to which the previous (price) hikes were attributed, has been repaired,” Energi Danmark analysts note, releasing pressure on prices.
In the wake of the war in Ukraine, Norway has become the main supplier of natural gas to the European continent.
Global gas consumption has also experienced a historic drop of 1.6% in 2022, in a context of war in Ukraine and disruptions in the supply of Russian gas to Europe, according to preliminary data from Cedigaz, l international association for gas information.
Since the beginning of the year, the price of European natural gas has fallen by almost 70%, but was still moving at higher levels than in previous years. In 2020, gas fluctuated around 15 euros per MWh.