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Thursday 16 March 2023 / 18:17
Four representatives of “OPEC +” said that oil prices fell this week to their lowest level in more than a year, which the group believes was driven by fears of financial crises, and not as a result of an imbalance between demand and supplies. and expects market stability.
Oil fell to a 15-month low on Wednesday, with Brent crude falling below $72 a barrel amid fears of continued banking crisis.
Crude oil settled on Thursday after Credit Suisse received substantial support from the Swiss National Bank.
“It is entirely driven by what is happening in the financial sector and has nothing to do with oil demand and supply,” said one of the representatives, who did not want to be named.
“OPEC+” also said the situation is “likely to wait and see”, with the expectation of a return to normalcy soon.
Three other delegates issued similar statements.
Those comments will dampen speculation that OPEC+ is concerned about falling prices and may consider further action to support the market.
The group’s next policy meeting isn’t until June, but an advisory group of key ministers will meet on April 3.
The latest monthly oil market report released by OPEC on Tuesday showed that expectations for Chinese demand growth rose, indicating a healthy balance between supply and demand, a representative said.
“We are focusing on the fundamentals of the market,” another source said.
As a result of the price collapse, OPEC+ lowered its production target by two million barrels per day in November, the biggest cut since the early days of the coronavirus pandemic in 2020. The cut will apply throughout 2023.
Algeria and Kuwait hailed the decision this week, with Saudi Energy Minister Prince Abdulaziz bin Salman (Energy Intelligence) saying in an interview that OPEC+ intends to stick to the deal to cut production until the end of the year.
