Oil prices at 10-month highs on supply concerns
While oil prices rose 2 percent yesterday and hit a 10-month high, as the Organization of the Petroleum Exporting Countries (OPEC) predicted supply would be tight, they are near the peak today.
As of 09/14, a barrel of Brent oil is trading at $92.18 in international markets, while crude oil is trading at $89.05.
Brent oil, which yesterday rose to $92.40 due to poor supply prospects and OPEC’s optimism about the durability of energy demand in major economies, closed the day at $92.06 with an increase of 1.6 percent. A barrel of West Texas Intermediate (WTI) crude oil rose 1.8 percent to $88.84.
Both indicators closed at their highest levels since November 2022.
SHORT SUPPLY INCREASES THE PRICE
In its monthly oil market report released yesterday, OPEC said it continues to forecast growth in global oil demand in 2023 and 2024.
According to the report, global oil demand this year is expected to increase by 2.4 million barrels compared to last year, reaching 102.1 million barrels. Global oil demand is estimated to increase by 2.25 million barrels per day next year compared to this year, reaching an average of 104.3 million barrels per day.
“Crude oil prices are rising after OPEC’s monthly report showed the oil market will be much tighter than initially thought,” said Edward Moya, senior market analyst at U.S.-based OANDA. .
As Saudi Arabia and Russia, the world’s two largest oil exporters, announced they would extend their supply cuts until the end of the year, four oil export terminals in the country were closed due to the floods and storms that hit Libya. OPEC+ member Kazakhstan reduced daily oil production for maintenance reasons.
EXPECTED DECREASE IN OIL STOCKS
The US Energy Information Administration (EIA) predicted that daily global oil production will increase to 101.2 million barrels in 2023 and 102.9 million barrels in 2024. The EIA predicted that global oil demand will increase to 101 million in 2023 and 102.3 million in 2024 daily.
The EIA said it expects global oil inventories to decline by nearly half a million barrels in the second half of 2023, which would cause Brent crude to rise to an average of $93 a barrel in the fourth quarter.