(New York) Oil prices nearly stagnated on Friday, caught between pending production cuts in oil-exporting countries that have driven prices higher since the start of the month, and recession fears.
A barrel of Brent North Sea crude for June delivery climbed 0.24% to $86.31.
Its US equivalent, a barrel of West Texas Intermediate (WTI), for May delivery, rose 0.43% to $82.52.
The International Energy Agency (IEA) on Friday lamented in its monthly report “the surprise cuts” in OPEC production announced on April 2.
These “risk worsening a rough supply shortfall in 2023 and raising prices at a time of greater economic uncertainty,” the group of rough-importing countries said.
“Recession alarmist rhetoric” is once again taking center stage, said Stephen Brennock, an analyst at PVM Energy.
The International Monetary Fund (IMF) slightly lowered its global growth forecast for 2023 earlier this week.
In the minutes of the last monetary meeting of the United States Federal Reserve (Fed) in March, the institution’s economists also estimated that the recent banking difficulties “could lead to a mild recession” this year in the United States.
The latest monthly report from the Organization of the Petroleum Exporting Countries (OPEC), released on Thursday, finally “echoed this challenging outlook”, noted Brennock, noting in particular “high inflation and the monetary tightening”.
But the alliance has paradoxically maintained its forecast for demand, which is expected to increase by 2.3 million barrels per day in 2023 compared to last year to reach 101.9 million barrels on average.
“OPEC expects a severely undersupplied market in the second half of 2023, but cuts production from May,” DNB analysts said, recalling that eight members of the OPEC group have decided beginning of April to cut their crude production by more than a million barrels per day from May, in addition to the cuts already announced by Russia.
But the looming rough shortage doesn’t appear to be enough to support prices, Exinity’s Han Tan said, arguing that “markets need to continually receive signs that global demand remains resilient” to offset recession fears.
