(LONDON) Oil prices were up slightly on Friday after falling the day before, as the prospect of OPEC production cuts regained the upper hand over lingering economic concerns.
Around 5:30 a.m. EST (11:30 a.m. Paris), a barrel of Brent from the North Sea, for delivery in August, took 0.45% to 76.30 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in July, gained 0.45% to 71.61 dollars.
Crude prices were moving marginally higher after a “very choppy week in oil markets” as investors “were forced to digest the latest OPEC deal amid further interest rate hikes and darkening outlook for the global economy,” commented Craig Erlam, analyst at Oanda.
Saudi Arabia announced on Sunday, after a meeting in Vienna of the Organization of the Petroleum Exporting Countries and their allies (OPEC), a further reduction in its production of one million barrels per day in July.
This voluntary cut comes as analysts agree that the oil market should be in deficit in the second half of the year, adding further tension.
The rise remains modest, however, as “recent warning signals for the global economy have raised new questions about the outlook for oil demand,” tempering prices, said Stephen Brennock, an analyst at PVM Energy.
The euro zone has indeed entered recession this winter, penalized by the decline in consumption under the effect of price increases and by the difficulties of German industry, according to data published Thursday by Eurostat.
“The US economy could suffer the same fate, with the possibility of a further interest rate hike from the Fed (US Federal Reserve, editor’s note) in response to persistently high inflation”, continues the analyst. The institution meets on Tuesday and Wednesday to decide on the continuation of its monetary policy.
Finally, in China, the world’s largest crude importer, economic data released earlier this week showed that exports fell for the first time since the start of the year.
In this context, “the outlook for (global) oil demand does not inspire confidence” in the short term, Brennock said.
The day before, prices had fallen sharply, the press having reported that talks took place on American soil between Iran and the United States and that the two countries were approaching a provisional agreement on the Iranian nuclear dossier. .
“Iranian oil exports are subject to strict international sanctions after former US President Trump withdrew from a multilateral nuclear deal with Iran in 2018,” DNB analysts explain.
A return of Iranian exports would represent the arrival on the futures market of more than one million barrels per day, a significant volume. The White House, however, quickly denied this information.