Oil prices are set to enter the weekend with a third straight week of declines after OPEC+’s latest meeting disappointing observers who said supplies could return to the market later this year.
The cartel said the outlook was dependent on market conditions, but that set off a scramble among oil traders, sending prices plunging by more than $3 earlier in the week before allowing prices to calm somewhat after Saudi and Russian officials made clear that a restoration of supplies was not guaranteed.
Saudi Arabia’s Energy Minister Abdulaziz bin Salman and Russian Deputy Prime Minister Alexander Novak speaking at the St. Petersburg Economic Forum Both Nothing has been decided and OPEC+ will use the market as a guide to take appropriate next steps.
Meanwhile, Bin Salman used the opportunity to slam Goldman Sachs for its bearish outlook for oil prices.
“I counted, it said bearish, bearish, bearish seven times over two pages. And what’s worse, technically and professionally, they gave the wrong numbers,” the Saudi official said, commenting on a report published by the bank shortly after the OPEC+ meeting, titled “Weakened View on Phasing Out Additional Voluntary Production Cuts.”
Unlike Goldman, JPMorgan suggested the OPEC+ announcement would have a fairly bearish impact on prices, as many OPEC+ countries are already producing beyond their quotas. Citi also brushed off talk of a supply recovery, saying it expects the production cuts to be fully extended into next year, according to Bloomberg. report Earlier today.
Meanwhile, Rystad Energy’s Jaland Rystad told Reuters: “Absent any adjustments, supply will remain adequate but demand will weaken slightly, which may necessitate further cuts.”
Meanwhile, prices received some support this week from the following announcements from the European Central Bank: Interest rate cutThe first interest rate hike in five years takes effect on Thursday, and many market participants seem to expect the Fed to follow suit, despite several signs to the contrary.
By Irina Slav of Oilprice.com
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