2023-09-08 22:17:14
Crude oil futures prices rose more than 2% on Friday (7th), with global benchmark crude oil futures Brent hitting the highest closing price this year as concerns about tightening supply outweighed market concerns about demand from China and the global economy.
Energy Commodity Prices West Texas Intermediate (WTI) futures for October delivery rose 64 cents, or 0.7%, to close at $87.51 a barrel, with the latest month WTI rising 2.3% this week. Delivered in NovemberBrent crude oil (Brent) futures prices rose 73 cents, or 0.8%, to close at $90.65 a barrel, the highest closing price for the latest month Brent since November 16, and rose 2.4% this week. Gasoline futures for October delivery rose 1.2% to close at $2.65 a gallon, up 2.4% this week. Delivered in OctoberThermal Fuel FuturesPrices rose 2.7% to close at $3.30 per gallon, up nearly 6.3% this week. Natural gas futures for October delivery rose 1% to close at $2.61 per million Btu, but still fell 5.8% this week.market drivers
WTI crude oilAfter rising for nine days in a row to the highest point this year, futures prices fell back on Thursday.Brent crude oilThe seven-day rally in futures also came to an end on the same day.
Analysts at Sevens Report Research said on Friday that as Saudi Arabia announced an extension of production cuts until the end of the year, the oil market turned to focus on tight supply conditions rather than recession-related demand risks.
Analysts believe the path of least resistance is “higher crude oil prices on tight physical market fundamentals and a technical breakout to new 2023 highs.”
Saudi Arabia announced on Tuesday that its 1 million barrels per day production cut would be extended for three months until the end of December. Russia also announced on the same day that its voluntary cut of 300,000 barrels per day would be extended until the end of December. As soon as the news came out, crude oil hit its highest level since November on Tuesday.
However, according to a Platts survey by S&P Global Commodity Insights, crude oil production by the Organization of the Petroleum Exporting Countries and its allies (known as OPEC+) increased by 120,000 barrels per day in August, reaching a daily average of 40.52 million barrels. The report shows that increased production in Iran, Iraq and Nigeria has more than offset the impact of Russia’s expanded production cuts.
Surveys show that Saudi Arabia’s crude oil production in August was 8.95 million barrels per day, a decrease of 100,000 barrels per day from the previous month and the lowest level since May 2021.
At the same time, Russia’s crude oil production fell by 20,000 barrels per day in August, reaching 9.4 million barrels per day. Russia pledged in July to cut supply by 500,000 barrels per day, but it clearly stated that it was cutting supply to the global market by reducing exports, rather than reducing production.
Commerzbank commodities analyst Barbara Lambrecht reported on Friday that the market will pay close attention to the monthly reports from the International Energy Agency (IEA), the Organization of the Petroleum Exporting Countries (OPEC) and the US Energy Information Administration (EIA) next week.
“The IEA has so far assumed that Russia’s voluntary production cuts will be phased out starting in October, with global supply falling short of demand by 1.3 million barrels per day in the fourth quarter. At a deficit of close to 2 million barrels per day, it may be almost as high as this season’s deficit .” she wrote.
“This should provide good support for prices as industrials move further below their five-year averages in the coming months.”
OPEC and EIA will release their monthly oil reports next Tuesday, while the IEA’s monthly report will be released next Wednesday.
1694238040
#Energy #afterhours #Market #focus #tightening #supply #outweighs #concerns #demand #crude #oil #rose #week #Anue #Juheng