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Country Reduced Barrel for 27 Months, Recognized OPEP+ and Official Prices. Oil Market, Chinese Demand and Global Stocks Influence.
Oil prices fluctuated throughout this week, with highs and lows reflecting the instability of the international market. Saudi Arabia is increasingly worried about this situation, which may directly influence the oil contracts in the futures markets.
The WTI and Brent crude oils, considered commodities of great importance for the global economy, have seen a significant increase in their values, demonstrating the volatility of crude oil at the moment. These variations can have significant impacts on various sectors of the global economy.
Oil Market Stability and Saudi Efforts
This Tuesday, news emerged that Saudi Arabia — which announced the reduction of its official prices for its oil barrel to various regions for 27 months — recognized the efforts of the members of the Organization of the Petroleum Exporting Countries and allies (OPEP+) to maintain market stability of the commodity, through the signing of the ‘Declaration of Cooperation’, illustrating Saudi Arabia’s clear willingness to support stable prices.
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Petrobras evaluates suspension of sales to distributors and considers canceling the cooking gas auction following guidelines from the Federal Government.
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Lula reveals a masterstroke by Petrobras to undo a deal made by Bolsonaro, which involves the return of an important refinery that currently produces less than half of what was expected and makes Brazil dependent on international diesel.
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A study confirms that the natural gas sector will reduce greenhouse gas emissions in Brazil by 0.5% and accelerate the energy transition by 2026.
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Petrobras implements a severe adjustment and confirms a 55% increase in the price of aviation kerosene with a proposal for installment payments for the companies.
Conflicts in the Middle East and Tensions in the Red Sea
Meanwhile, the escalation of conflicts in the Middle East has taken a back seat this week, with few updates on the progress of tensions in the Red Sea.
Conflict and Effects on Raw Material Prices
According to the World Bank, the effects of the conflict on raw material prices are being ‘well mitigated’ so far, although historically an escalation could severely affect the supply of the commodity, especially if major players in the sector become involved.
Fall in Prices and Concerns about Supply Disruption
For City Index, despite the recent drop in prices and the possible weakness in Chinese and global demand, the drop in prices should be limited by the ‘ongoing concerns’ about the potential supply disruption of oil coming from the Middle East.
Brent Price Forecast and Increase in Global Stocks
Alongside Tuesday’s scenario, the U.S. Department of Energy (DoE) reduced its Brent price forecast for 2024 for the second consecutive month, now expecting the barrel to end this year at US$ 82, and to close 2025 at US$ 79. In the document released this Tuesday, the DoE warns of an increase in global oil stocks during the last quarter of 2023, indicating a well-supplied market.
Source: CNN Brasil
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