(BFM Bourse) – Oil prices have peaked for two months, at more than 80 dollars for a barrel of WTI, as the explosive situation in Kazakhstan, combined with supply problems in Libya, raises fears for the ‘offer.
In just over two weeks, since their low on December 20 triggered by the imposition of new restrictions due to the spread of the Omicron variant, barrel prices of Brent and WTI have respectively recovered 18.5% and more than 20%.
If Wednesday’s rise was to be blamed on status quo OPEC + as regards its supply policy, namely a gradual increase of 400,000 barrels per day (bpd) until December 2022, that, more pronounced, this Thursday, is in particular due to the current events in Kazakhstan. In the grip of demonstrations – linked to the soaring gas prices – which turned into a riot, this former Soviet republic (independent since 1991) was the scene of violence on Thursday, the police having admitted having killed several dozen of protesters in Almaty, the country’s largest city. Kazakh President Kassym-Jomart Tokayev on Wednesday asked for help from Russia and its allies to quell the ongoing riots in his country, according to him the work of “terrorists” trained abroad.
This explosive situation makes operators of the oil markets fear that the country, which currently produces 1.6 million bpd, will see its supply constrained by these disturbances. Even if it is difficult to say at this stage that the local producer of black gold, Kazakshtanet, is affected by the current crisis – the mining company Kazatomprom, the largest uranium producer in the world, for example assured Thursday that the current unrest had no impact on its production or exports.
At the same time, Libyan oil production has collapsed from an average of 1.3 million bpd in 2021 to around 730,000 barrels a day currently according to figures from the National Oil Corp, due to maintenance and field closures. petroleum.
As a result, the increase in production in OPEC member countries was once again lower than that expected under the agreement concluded with the cartel allies, including Russia. According to a Reuters survey, the 10 members of OPEC actually pumped 27.8 mbd in December, 70,000 bpd more than the previous month, but significantly less than the increase of 253,000 bpd allowed by the agreement on the offer – corresponding to the share of the increase shared by the 10 countries forming OPEC, when the other members of the alliance known as OPEC + (Russia but also Mexico, Azerbaijan, Bahrain, Brunei, Malaysia, Oman, Sudan, South Sudan … and Kazakhstan) are responsible for the remainder of the increase in supply, ie 147,000 bpd per month.
All these elements show that if demand is set to pick up again at the end of the “Omicron wave”, supply, constrained by supply difficulties and other political instabilities, could have difficulty keeping pace.
Around 4:50 p.m. this Thursday, the barrel of Brent thus recovered 1.7% to 82.1 dollars, the highest since the end of last November, when the barrel of WTI appreciated by 2.3% to 79.6 dollars, after having again crossed the $ 80 threshold earlier in the afternoon for the first time since November 17.
Quentin Soubranne – © 2022 BFM Bourse