Oil: lower prices with rumors of a potential drain on US reserves

Oil prices fell on Friday, weighed down by data from the Organization of the Petroleum Exporting Countries (OPEC) pointing to weaker-than-expected demand growth for black gold in 2021 and by rumors of potential levies in US strategic reserves.

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The price of a barrel of Brent North Sea oil for January delivery fell 0.92% to $82.17 in London from Thursday's close. In New York, a barrel of West Texas Intermediate (WTI) for the month of December lost 0.98% to 80.79 dollars.

Despite familiar highs on Wednesday morning, the two benchmark contracts on both sides of the Atlantic are down slightly over the week. The operators had in mind a possible American intervention to respond to the shortage of crude oil supply. The potential release of part of the country's Strategic Petroleum Reserves (SPR), one of the options being considered, “puts a heavy ceiling on WTI,” said Han Tan of Exinity. "It would be a dramatic effort to send a signal to the global energy market that stronger supply is taken seriously to bring prices down," said John Kilduff of Again Capital. According to him, to achieve its goal, this initiative to pour reserves into the market had to be taken “in coordination” with other countries to effectively influence prices. "The market in any case has been highly reactive to these rumors of withdrawal in the reserves, perhaps more than I expected," said John Kilduff.

OPEC lowers its estimate

For its part, OPEC revised down again on Thursday its estimate of growth in global oil demand for this year, under the effect of the deceleration of the recovery in China and India in the third quarter . In its November monthly report, the cartel estimates that global oil demand will jump by 5.7 million barrels per day (mbd) for the whole of 2021, while it was expecting slightly higher annual growth. the preceding month. While it tends to somewhat limit the recent rise in crude prices, the report “has only made marginal changes to the estimates of supply and demand for this year and next year”, qualify the experts from ING.