Brent, the reference oil for Angolan exports, fell by more than 5 percent this Tuesday, penalized by a new confinement in China and by growing fears of a global recession.
At 3 pm, a barrel of North Sea Brent for delivery in October was down 5.05 percent to $99.78 and a barrel of North American WTI oil, for delivery in the same month, lost 4.84 percent to 92.31 dollars. On the supply side, concerns appear to have subsided, despite civil unrest in Iraq and Libya, two key OPEC members.
The Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, are due to meet early next week to decide on future production levels. The energy minister of Saudi Arabia raised the possibility last week that the group would cut production, saying that futures markets were not reflecting the restriction of the physical market. Thus, it would be quite difficult to justify a supply cut with prices around 100 dollars a barrel, and several members are reluctant to reduce their sources of revenue. The American Petroleum Institute will update the stock of oil and oil products in the United States of America as usual. The expectation is that there will be a drop of 600 thousand barrels in stock.
Last Friday, oil prices closed higher, with Brent (the benchmark for Angolan exports) rising by USD 1.65, closing at USD 100.99 a barrel. US WTI crude oil futures rose 54 cents to trade at $93.06 a barrel. For the week, Brent gained 4.4 percent, while WTI rose 2.5 percent. The rally was driven by signals from Saudi Arabia that the Organization of the Petroleum Exporting Countries (OPEC) could cut output, but trading was volatile as investors digested the scenario and ultimately ignored warnings from the head of the US Federal Reserve on economic difficulties in sight.
Futures markets
WTI crude for October ended with a gain of 0.58 percent, at around 0.52 dollar, at 93.06 a barrel, on the New York Mercantile Exchange (Nymex), and Brent for November advanced 0.56 percent. (USD 0.55), at 99.01 dollars a barrel, on the Intercontinental Exchange (ICE). For the week, WTI recorded a gain of 2.90 percent and Brent, 2.37 percent. The UAE has become the latest OPEC+ member to claim that it is in line with Saudi Arabia’s thinking on oil markets.
