(New York) Oil prices limited their losses on Wednesday, after initially falling following the postponement of the OPEC alliance meeting, with analysts finally putting into perspective the impact of this decision.
A barrel of North Sea Brent for January delivery lost 0.59%, closing at $81.96. The European benchmark for black gold dropped up to 4.89% during the session.
As for the barrel of American West Texas Intermediate (WTI) of the same maturity, it fell by 0.86%, to 77.10 dollars. It had plunged as much as 5.11% earlier in the day.
The market initially reacted sharply to the announcement of a postponement of the ministerial meeting of members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the OPEC agreement.
The meeting was postponed from Sunday to Thursday, November 30, according to a press release that provided no explanation for the decision.
Two sources indicated that the postponement was linked to differences within the cartel, including “disagreements between (Saudi Arabia) and African countries over quotas.”
“Initially, the market thought there might be a possibility that Saudi Arabia would ramp up production if other countries didn’t meet their quotas,” said Andy Lipow of Lipow Oil Associates.
But, according to this analyst, operators have changed their minds and now see this fault line as the refusal of certain members of the alliance to make additional production cuts.
Only nine of the 23 partners in the OPEC agreement have so far agreed to volume reductions. A movement launched by the Saudis, who have cut their production by a million barrels per day since July.
“The data shows that several (member) countries are exceeding their quotas,” recalled Andy Lipow, undermining Riyadh’s efforts to support the courses.
For the analyst, it will take a shock announcement at the end of the November 30 meeting to move prices significantly.
“Today, prices are barely above where they were before OPEC made all these production cuts,” he stressed.
Long preoccupied with supply, the market has become more interested in demand for several weeks, against a backdrop of slowdown in the global economy.
The latest report from the American Energy Information Agency (EIA), published on Wednesday, did not reassure him.
It showed that U.S. commercial crude oil inventories jumped by 8.7 million barrels in the week ended Nov. 17.
A figure well above the expectations of analysts, who predicted an increase of only 1.75 million barrels, according to a consensus established by the Bloomberg agency.
In addition, in the American market, deliveries of gasoline (-5%) and kerosene (-16%) decreased, a sign of a deceleration in demand.