The 60 candles will have to wait. The OPEC (Organization of the Petroleum Exporting Countries) has postponed the meeting that was to be held this September for its anniversary. And it has done so because of the culprit of the yo-yo effect that has hit oil prices for months and will leave a mark on its demand until 2023: the coronavirus crisis.
Everything was ready in Baghdad. The third city in the Arab world, which in 1960 hosted the foundation of the organization carried out by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, had decked itself out "for months for such a historic event," the Iraqi oil minister recently lamented. Ihsan Abdul Jabbar Ismaael.
Currently, it is made up of 13 countries and collaborates closely with other major global shale producers such as Russia.
"Volatility continues to be the common denominator in the week (of its anniversary) due to the uncertainty about the demand for crude oil," say experts from Hargreaves Lansdown. "The yo-yo effect has left a dent in Brent and the West texas as investors try to predict and anticipate the future need for black gold, "they add.
Yes, oil demand has rebounded in recent months since its black March (with West Texas entering negative territory for the first time in its history), but "the outbreaks in Europe and the US have again hit sectors such as the airlines throwing another big question mark on world fuel demand. "
OPEC itself has been forced to meet telematically since the start of the pandemic. In any case, oil production has been trickling little by little in August after the historic cut of 7.7 million barrels per day agreed by the agency, which meets next week to reassess the terrain.
Production snips are not being enough and there are more and more barrels of unwanted crude on the market. Companies like Trafigura, a multinational based in Singapore and dedicated to the metal and energy business, is contracting tanks to store millions and millions of excess barrels in the sea.
PETROLEUM LOOKS LOOK AT THE US ELECTIONS
The oil crisis especially affects the US, the world's largest producer ahead of Russia. Since the beginning of the pandemic, the country has closed its extraction platforms (-71% year-on-year) and is currently at a minimum of 15 weeks ago. based on data collected and published by Baker hughes.
Shale producers are also at stake in the November elections. If Joe Biden takes the White House from Donald Trump, as several polls have indicated, oil can be one of the worst unemployed knowing its affinity with renewable energy.
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