Brent is back above $80 per barrel

In a report sent to Rigzone on Friday, Bjarne Schieldrop, chief commodity analyst at Skandinaviska Enskilda Banken AB (SEB), pointed out that the price of Brent crude oil has returned above $80 today.

“Brent crude rose to $79.87 a barrel yesterday and recovered another 1.9 percent from recent losses,” Schieldrop said in the report.

“Brent crude is trading just above the 80 line (+0.2 percent) this morning, aligning well with some smaller gains in industrial metals as well as gains in Asian stocks,” he added.

Schieldrop noted in the report that Brent fell to $76.76 a barrel on Tuesday after last Sunday’s OPEC+ meeting.

“This was the lowest since the beginning of February this year,” he pointed out.

“Shocked by the drop in prices, OPEC+ has been prompted to issue statements with assurances that they did not really mean what they said or mean what they meant, and that in no way… (are they) moving away from ” price over volume” with a shift to an aggressive market share recovery,” he added.

“At least not yet. And yes, the group explicitly stated last Sunday that it would reintroduce the two million barrels per day of voluntary cuts from Q4-24 to Q3-25, should market circumstances permit. And nobody really thinks there’s going to be room for that volume to come back into the market in that time,” he continued.

“So basically it’s not going to happen. But the statement issued…last Sunday still rings very clear to the market: the current OPEC+ production cuts are not forever. So to all non-OPEC+ producers: Prepare, make room, for the return of these volumes,” Schieldrop continued.

Also in the report, Schieldrop noted that the European Central Bank’s (ECB) interest rate cuts give hope for economic acceleration and increased oil demand.

“The ECB cut its policy rate yesterday for the first time since 2016 as inflation is under control,” he pointed out.

“The hope is that this is the start of further interest rate cuts in many central banks around the world as inflation is under control not just in Europe but in most of the world. And, of course, further that this will be the beginning of a broader economic acceleration and therefore stronger growth in oil demand,” he added.

“Certainly that’s what OPEC+ is hoping for. This stronger growth in oil demand will make way for a return to group cuts,” he continued.

Schieldrop also pointed out in the report that U.S. crude oil production rose to 13.18 million barrels per day in March, which he noted was “just 77,000 barrels per day month over month.”

“Nothing would be sweeter news for OPEC+ than to see U.S. crude production completely flatten here,” Schieldrop said in the report.

“And it would indeed be the right choice of action for US shale oil producers, given that non-OPEC+ producers have … (have) now received notice: the cuts are not forever,” he continued.

For more news on the recent OPEC+ deal, see below:

JP Morgan, S&P Global, Rystad Watch the latest OPEC+ move

OPEC+ outcome looks problematic for 2025, Macquarie warns

Analysts warn against rationalizing the reaction to the OPEC+ meeting

IMC analysts examine the good, the bad and the ugly of OPEC+ policy

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