(BFM Stock Exchange) – Petroleum and parapetrol groups fell to the Paris Stock Exchange after the decision of OPEC+ countries to accelerate the increase in their black gold production.

It is a decision that disturbs an already very weakened oil market even more. The countries of the organization of the oil exporting countries and their allies (OPEC+) decided this weekend to greatly increase oil production for the month of June.

Saturday, May 3, eight members of the cartel (Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman), thus agreed to accelerate their production to 411,000 barrels per day for the month of June, the same level as in May. This level is equivalent to “three monthly increases”, said OPEC in a press release.

Monday, May 5, black gold fell in reaction to these announcements. The July contract on the Brent de Mer du Nord abandons 1.9% and that of the same deadline on the WTI listed in New York is dropping 2%. The two references of black gold evolve at the lowest in February 2021.

Suffering parapetrollers

As often, when oil prices vary strongly, several sectors react. The oil and parapetrol groups, whose activity depends on the prices of the crude, begin the week under pressure. On the SBF 120, Virid gives 5.80%, Technip Energies returns 3.90%, Maurel & Prom folded by 2.7%when Vallourec loses 2.40%. Flagship value of the CAC 40, Totalenergies contains its withdrawal at 0.55%.

Major Oil had already warned that the market context would be more demanding in 2025, on the occasion of the publication of its quarterly results on Wednesday, April 30.

“The prospects for the evolution of the demand for oil in the year 2025 are down while the OPEC+ countries (organization of the oil exporting countries and their allies), have wanted to continue the market to return to the market for certain voluntary production reductions in the second quarter of 2025,” said totalnergies.

“Consequently, the oil markets remain volatile between 60 and 70 dollars per barrel and the refining and petrochemical margins should remain depressed,” the company continued. Totalenergies.com/fr/actualites/communiques-de-presse/totalenergies-publie-son-document-d registration-2024″>In its 2024 universal registration document, the company also reported an organic cash-ISCS of 25.4 dollars per barrel of Brent in 2024, before dividend.

Dead organic stall before dividend is defined as the price of the Brent for which the raw self -financing margin covers organic investments, and measures the company’s capacity to resist variations in price for the barrel of Brent, recalls totalnergies.

On the other hand, airlines are increasing. On the Paris Stock Exchange, Air France-KLM increased by 2.1%, when Lufthansa gained 1.8% in Frankfurt. Air transport groups are also sensitive to the evolution of oil prices because the fuel bill remains one of the main spending stations of the companies.

According to the Air France-KLM universal recording document, this invoice represented in 2024 a total amount of 6.73 billion euros, down 5.6% compared to 2023. On January 10, the air transport group quoted that an average of 10 dollars in the price of the barrel of Brent would lead to an increase in this invoice of $ 487 million (after coverage) and $ 432 million.

“A bomb on the oil market”

“OPEC+ has just launched a bomb on the oil market,” said Jorge Leon, from Rystad Energy to AFP.

The cartel’s decision surprises the markets since in April the group had in fact added only 138,000 daily barrels on the market, in accordance with its progressive reintroduction strategy of black gold production, voted in December 2024. OPEC+ “decided to make an equally aggressive increase in the offer for the month of June”, note the economists of ING.

The enlarged cartel therefore accelerates the pace, saying that “the fundamentals of the oil market were healthy” to justify this surprise decision.

“After the signal of last month, the (Saturday) decision sends a clear message: the group changes its strategy and seeks to regain market share after years of cuts,” adds the specialist of Rystad Energy. Until the end of 2024, the producing countries, including Saudi Arabia, had set up production reductions to support oil prices and thus stabilize the market.

“This decision comes in a context of increased uncertainty concerning the American and global economic prospects, in particular due to the lack of clarity as to the trajectory of the current trade war,” recalls Samer Hasn, senior market analyst at XS.com.

Goldman Sachs is expecting the OPEC+ to continue to flood the market for its oil barrels in July. “We are still expecting OPEC+ to implement a final increase in production in July, but we are now planning an increase of 0.41 million barrels per day (MB/J) (against 0.14 Mb/d before),” they say.

Goldman Sachs says he is convinced that the “risk of recession makes people weigh downwards on oil prices, despite relatively close fundamentals on the market”.

The two references of black gold are under pressure, weighted by the fears of a global recession caused by the trade war initiated by Donald Trump. Since the beginning of the year, the price of a barrel WTI and that of the Brent have returned almost 20%.

Will a barrel price at the carpet promote large maneuvers in the petroleum industry? According to information reported by Bloomberg in the weekend, the Anglo-Dutch shell would eye its British BP rival.

“Shell works with advisers to assess a possible BP acquisition, although it awaits new reductions in oil prices before deciding whether or not to continue an offer,” two sources close to the file in the financial media said.

“The final decision will probably depend on the continuation of the fall in the course of BP action,” added these same sources to Bloomberg. This rumor of rapprochement occurs when BP is in a delicate situation. The oil giant has indeed unveiled last week, highly degraded results.