This Sunday the OPEC+ (Organization of Petroleum Exporting Countries) meeting took place and the decisions are having an impact on the price of oil, which is practically close to its lowest level this year. The oil companies of the Old Continent are also suffering the effects and this Tuesday they accumulate intense collapses in the stock market.
The organization agreed at the meeting maintain current production cuts until next year. However, the voluntary discounts applied by some of its members will be progressively returned to the market starting in October of this year. This latest news alone has been enough to cause a wave of selling, not only in oil prices, but also in oil companies.
After losses of more than 4% this Monday, Brent (the reference price in the Old Continent) fell again this Tuesday and fell below 77 dollars per barrel and puts your annual accounts in negative. It is already found less than 2% away from the minimums of the current year that marked the beginning of 2024 at $75.89 per barrel. In just two months, since it set highs of the year at the beginning of April at $91, a barrel of oil has lost more than 15% of its value.
Nor has West Texas (the benchmark in the United States) managed to escape the clutches of the bears and its price falls to $72 per barrel.
The fall in European crude oil is also noticeable in the European energy sector, which in this session registered a decrease of more than 2%. And, among the main oil companies on the Old Continent, BP and Equinor bear the brunt: they suffered declines of over 3% in the session.
The correction of the English price on the day is even close to 4%, in what is its worst stock market session since October of last year. In addition to how the fall in oil prices is affecting him, this Tuesday it was also known that S&P cut its credit outlook from positive to stableclaiming that “we project funds from operations (FFO) to debt to remain between 50% and 55% in our base case and below 45% in our mid-cycle Brent oil price assumption at 55 dollars per barrel,” according to Bloomberg.
With this strong decline, the price of the English price falls to the levels of last February and, like Brent, becomes negative in the year. The expert consensus collected by FactSet recommends buying its securities, which it gives an upward potential of 28% for the coming months.
For its part, the Norwegian oil company plummets to levels seen at the end of March. In its case, its shares were already negative before this new fall in the year, but now the stock market decline in 2024 reaches 8% and is established among the most bearish oil companies on the European continent. However, the favor of the analysts is not with her: They only give it a 1% upside potential and strongly recommend selling its securities.
Eni, TotalEnergies, Repsol, Shell and Galp also suffered falls of over 2% this Tuesday. Among these companies, only the Italian corrects in the exercise. With its decline of more than 8%, it is, in fact, the most bearish oil company on the Old Continent this year. The rest register increases in 2024 of 4.5% in the case of the French, 8.2% in the case of the Spanish and British and 42% in the case of the Portuguese.
Of all of them, analysts prefer Shell, which they give the best buy recommendation in the continental sector. Together with it and BP, only Repsol also achieves an advice to buy its shares from the experts.
