Oil Prices Surge to Nine-Month High Amid Concerns Over Tight Supply


By Scott Disavino

Thank you for reading this post, don't forget to subscribe!

NEW YORK (Reuters) – Oil prices climbed nearly 1% to reach a nine-month high on Friday, driven by rising U.S. diesel futures and growing apprehensions regarding constrained oil supplies following Saudi Arabia and Russia’s recent extension of supply cuts.

Brent futures saw a 73-cent increase, equivalent to 0.8%, settling at $90.65 per barrel, while U.S. West Texas Intermediate (WTI) crude experienced a 64-cent rise, or 0.7%, concluding at $87.51.

Both crude benchmarks remained in technically overbought territory for the sixth consecutive day, with Brent’s settlement marking its highest level since November 16, and WTI’s settlement reaching its peak since September 6, which was also its highest point since November.

Over the course of the week, both benchmarks recorded gains of approximately 2%, building on the previous week’s increases of about 5% for Brent and approximately 7% for WTI.

“Crude prices continue to respond to supply-side factors. There is no doubt that OPEC+ will maintain tight control of this market as we move into the winter months,” commented Edward Moya, senior market analyst at data and analytics firm OANDA.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, made headlines this week by extending their voluntary supply cuts, totaling 1.3 million barrels per day, until year-end.

Commerzbank analysts suggested that Saudi Arabia may find it challenging to discontinue its cuts at the end of the year without triggering a decline in prices.

In the United States, energy companies added one oil rig this week, marking the first weekly increase since June, according to data from energy services firm Baker Hughes.

Additionally, rising U.S. diesel prices lent support to crude prices, with heating oil futures recording an uptick of about 3%. Energy traders observed that seasonal refinery maintenance in Russia during September might reduce diesel exports but potentially lead to an increase in oil exports.

In separate news, Venezuelan President Nicolas Maduro embarked on his first visit to China in five years. As China stands as the world’s largest oil importer and Venezuela holds the world’s largest proven crude reserves among OPEC members, this visit holds significance for the oil market.

Nevertheless, concerns persist about the demand outlook in China due to its sluggish post-pandemic recovery and unmet stimulus pledges. China has been grappling with the heaviest rainfall in Hong Kong in 140 years, which has had adverse effects on the nation’s economy.

Furthermore, data revealed that both Chinese exports and imports declined in August, as weakened overseas demand and reduced consumer spending placed pressure on businesses.

In Germany, the lower house of parliament passed a bill that could lead to reduced future fossil fuel demand by phasing out oil and natural gas heating systems.

Oil traders are closely monitoring the actions of central banks in the United States and Europe, assessing whether they will combat inflation with interest rate hikes. John Evans of oil broker PVM highlighted the delicate balancing act faced by Saudi Arabia, acknowledging that tightening the market could disrupt progress made by central banks in controlling inflation, as interest rate hikes can potentially slow economic growth and reduce oil demand.

Share post:

[tds_leads title_text="Subscribe" input_placeholder="Email address" btn_horiz_align="content-horiz-center" pp_checkbox="yes" pp_msg="SSd2ZSUyMHJlYWQlMjBhbmQlMjBhY2NlcHQlMjB0aGUlMjAlM0NhJTIwaHJlZiUzRCUyMiUyMyUyMiUzRVByaXZhY3klMjBQb2xpY3klM0MlMkZhJTNFLg==" f_title_font_family="653" f_title_font_size="eyJhbGwiOiIyNCIsInBvcnRyYWl0IjoiMjAiLCJsYW5kc2NhcGUiOiIyMiJ9" f_title_font_line_height="1" f_title_font_weight="700" f_title_font_spacing="-1" msg_composer="success" display="column" gap="10" input_padd="eyJhbGwiOiIxNXB4IDEwcHgiLCJsYW5kc2NhcGUiOiIxMnB4IDhweCIsInBvcnRyYWl0IjoiMTBweCA2cHgifQ==" input_border="1" btn_text="I want in" btn_tdicon="tdc-font-tdmp tdc-font-tdmp-arrow-right" btn_icon_size="eyJhbGwiOiIxOSIsImxhbmRzY2FwZSI6IjE3IiwicG9ydHJhaXQiOiIxNSJ9" btn_icon_space="eyJhbGwiOiI1IiwicG9ydHJhaXQiOiIzIn0=" btn_radius="3" input_radius="3" f_msg_font_family="653" f_msg_font_size="eyJhbGwiOiIxMyIsInBvcnRyYWl0IjoiMTIifQ==" f_msg_font_weight="600" f_msg_font_line_height="1.4" f_input_font_family="653" f_input_font_size="eyJhbGwiOiIxNCIsImxhbmRzY2FwZSI6IjEzIiwicG9ydHJhaXQiOiIxMiJ9" f_input_font_line_height="1.2" f_btn_font_family="653" f_input_font_weight="500" f_btn_font_size="eyJhbGwiOiIxMyIsImxhbmRzY2FwZSI6IjEyIiwicG9ydHJhaXQiOiIxMSJ9" f_btn_font_line_height="1.2" f_btn_font_weight="700" f_pp_font_family="653" f_pp_font_size="eyJhbGwiOiIxMyIsImxhbmRzY2FwZSI6IjEyIiwicG9ydHJhaXQiOiIxMSJ9" f_pp_font_line_height="1.2" pp_check_color="#000000" pp_check_color_a="#ec3535" pp_check_color_a_h="#c11f1f" f_btn_font_transform="uppercase" tdc_css="eyJhbGwiOnsibWFyZ2luLWJvdHRvbSI6IjQwIiwiZGlzcGxheSI6IiJ9LCJsYW5kc2NhcGUiOnsibWFyZ2luLWJvdHRvbSI6IjM1IiwiZGlzcGxheSI6IiJ9LCJsYW5kc2NhcGVfbWF4X3dpZHRoIjoxMTQwLCJsYW5kc2NhcGVfbWluX3dpZHRoIjoxMDE5LCJwb3J0cmFpdCI6eyJtYXJnaW4tYm90dG9tIjoiMzAiLCJkaXNwbGF5IjoiIn0sInBvcnRyYWl0X21heF93aWR0aCI6MTAxOCwicG9ydHJhaXRfbWluX3dpZHRoIjo3Njh9" msg_succ_radius="2" btn_bg="#ec3535" btn_bg_h="#c11f1f" title_space="eyJwb3J0cmFpdCI6IjEyIiwibGFuZHNjYXBlIjoiMTQiLCJhbGwiOiIxOCJ9" msg_space="eyJsYW5kc2NhcGUiOiIwIDAgMTJweCJ9" btn_padd="eyJsYW5kc2NhcGUiOiIxMiIsInBvcnRyYWl0IjoiMTBweCJ9" msg_padd="eyJwb3J0cmFpdCI6IjZweCAxMHB4In0="]


More like this

“Global Banking Group IIF Confirms Marrakech Meeting Despite Earthquake Challenges”

The Institute of International Finance (IIF) has confirmed that...

Federal Govt Declares Public Holiday

September 25, 2023. Azonuchechi Chukwu. The Federal Government has declared Wednesday,...

Kerry Washington recently discovered her ‘dad’ is not her biological father

September 25, 2023. Azonuchechi Chukwu. Kerry Washington is opening up about...

Tinubu backs dredging of Oguta/Orashi River

...As Uzodimma receives survey report from Navy Indications that...
Verified by MonsterInsights