Oil prices slide as OPEC opens the floodgates

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Oil prices plunged further on Thursday, with the price of WTI falling more than 6% late in the morning as OPEC output increased in September compared to August.

WTI spot prices had fallen 6.04% to $ 37.79 by 11:28 a.m. EDT, while Brent was down 5.22% to $ 40.09.

The catalyst for this morning’s price drop is OPEC + maritime exports in September, which fell to 22.84 million barrels per day from the 22.11 that the cartel exported by sea in August.

For OPEC in particular, its exports increased from 17.53 million b / d in August to 18.2 million b / d in September.

A Reuters survey shows that OPEC’s production for September increased 160,000 bpd from the previous month. OPEC is still in compliance. The culprits of this increase in production are mainly Iran and Libya, both exempt from production quotas.

The market interprets this increase in production as a viable threat to any rebalancing of the oil market.

Further pressure on oil prices is the ubiquitous question of demand – a measure that has been constantly pushed down by the pandemic. Bearish demand factors include another round of major airline layoffs affecting tens of thousands of employees, an impromptu Madrid lockdown due to rising coronavirus cases and disappointing vaccine news – two trials of Separate vaccines have resulted in unpleasant side effects including high fever, body aches, headaches and exhaustion, to name a few.

While vaccine news does not spell the end of either vaccine, it may reduce the number of people willing to sign up for the vaccine if either vaccine is ultimately approved. .

It is the vaccine that OPEC highlighted at a meeting Thursday as the linchpin of stabilizing the oil market and accelerating “the pace of economic recovery.”

By Julianne Geiger for OilUSD

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