Friday, April 23, 2021
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Home Breaking News Brent and WTI quotes began to decline again

Brent and WTI quotes began to decline again

Prices for “black gold” benchmark marks during trading on Wednesday afternoon returned to decline after morning growth, and investors are waiting for news on the fate of the OPEC + deal, as well as statistics on US stocks.

As of 13:07 Moscow time, June futures for North Sea Brent oil blend fell by 0.53% to $ 63.83 per barrel, and May futures for West Texas WTI grade – by 0.51% to $ 60.24 per barrel, reports PRIME.

As director of the Academy of Finance and Investment Management Arseny Dadashev notes, “the market continues to trade in a volatile mode, and this nervousness persists ahead of the OPEC + meeting (April 1 – ed.)”.

“Judging by the speculations, the exporters of the alliance are likely to maintain their current quotas in May, and possibly immediately in June. In this scenario, Brent will rise in price, but moderately, since for the most part it has already been taken into account in prices, ”the expert said in his review.

Let us also recall that at the end of the first quarter of 2020, several waves of falling prices for “black gold” swept across the world oil market. The negative situation was caused by a whole range of factors: a general overproduction of raw materials, a sharp drop in demand amid the rapid spread of the coronavirus infection COVID-19 (a pandemic was announced on March 11) and concerns about its impact on the global economy, as well as the collapse of the OPEC + deal (officially from April 1, but in fact after fruitless negotiations between the oil-producing countries at a meeting on March 6 in Vienna).

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However, on April 12, the OPEC + countries agreed on a new deal, in which 23 states became participants. The agreement is designed for 2 years – from May 1, 2020 to May 1, 2022. The new OPEC + deal was a forced reaction of oil-producing countries to the market situation and pressure from the United States. However, in general, it did not cover the volumes of the decline in global demand, and besides, huge reserves of raw materials have accumulated on the market.

During 2020, the OPEC + countries held meetings, adjusting the parameters of the transaction taking into account the situation on the world oil market – starting in May to reduce oil production by 9.7 million barrels per day, in August they relaxed the restrictions to 7.7 million for the period until the end 2020 year.

On January 4-5, 2021, the ministers of the OPEC + countries made a compromise decision, according to which, from February, Saudi Arabia will voluntarily reduce oil production by almost 1 million barrels per day within two months, to about 8.125 million barrels per day, and a few more OPEC member countries will cut production by two months by a total of 425 thousand barrels per day. At the same time, Russia and Kazakhstan got the opportunity to increase production in February and March.

On March 4, following a regular meeting, the OPEC + participants unexpectedly decided to maintain the current level of oil production for all countries of the alliance, except for Russia and Kazakhstan, which will be able to increase production by 130 thousand and 20 thousand barrels per day from April, respectively.

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