Brent oil cost $ 86 when Saudi Arabia promised to be careful with supplies

(Bloomberg) – Saudi Arabia has raised oil prices by more than $ 86 a barrel after the OPEC + coalition said it needed to continue its careful approach to controlling global crude supplies due to concerns over the outbreak.

Read a lot from Bloomberg

International Benchmark Brent grew 0.8% in seven consecutive weekly gains, with West Texas Middle the highest since 2014. Saudi Energy Minister Prince Abdulaziz bin Salman told Bloomberg Television over the weekend that producers should not bring in growth for prices. That consensus was echoed in both Nigeria and Azerbaijan.

Oil has more than doubled in the past 12 months following the global economic downturn caused by the cholera epidemic. As consumption continues to rise, the Organization of Petroleum Exporting Countries (OPEC) and its partners are set to reduce prices by 2020. That brought Brenn to the forefront when stocks fell in 2018 and when key balloons were distributed.

“Saudi comments reinforce OPEC +’s view that it will continue to be cautious, and that demand is better, which means the market will continue to grow for the rest of the year,” said Warren Patterson, head of ING Groep Commodity Strategy. NV in Singapore. “So more reinforcement will definitely leave potential for more flexibility.”

The profit from crude was supported by a strong strike in natural gas, which in turn increased demand for petroleum products. Prince Abdulaziz warned that if the northern hemisphere is colder than usual and companies switch from gas to crude, consumption could increase by 500,000-600,000 barrels per day, adding that more barrels than OPEC + would not be needed to reduce gas costs in Europe. Asia or gasoline in the US

According to Goldman Sachs Group Inc., the conversion of gas into oil could add up to 1 million barrels a day to global demand. In a statement on October 24, the bank said:

Still, with signs of a pandemic, China has been battling a revised CV-19 outbreak overseas due to differences in the Delta. The outbreak has spread to 11 states in the week since October 17, said Mi Feng, a spokesman for the National Health Commission.

OPEC + is currently increasing its daily production by 400,000 barrels per month and has resisted pressure to do more. Strict adherence has been made to some members’ inability to reach the quota. The cartel will meet on November 4.

With stocks falling, the market has fallen sharply, with more recent adolescents being the most popular wholesale. The difference between this December and 2022 WTI contracts reached $ 12 a barrel. The difference between the latest contracts, known as instant messaging, rose from 75 cents a week to $ 1.38.

“WTI is also pulling Brent up,” Patterson said. “There are obvious concerns at Cush Inventory standards, which are well reflected in WTI’s rapid distribution.”

Most read from Bloomberg Business Week

© 2021 Bloomberg LP

Leave a Comment