Oil prices inched upwards: On Thursday, U.S. oil prices surged, hitting their highest level over a year. This was because the U.S. oil storage decreased significantly. This event adds to fears about limited supply due to OPEC+ cuts.
Brent oil futures rose by 36 cents, hitting a record high of $96.91 per barrel, unseen since November. The price of a barrel of U.S. West Texas Intermediate oil (WTI) rose by 24 cents to $93.92. This was worth over $95a record not broken since August 2022.
Tamas Varga, an oil dealer at PVM, attributes the rise to supply shortage and inventory drop.
The U.S. oil storage decreased by 2.2 million barrels last week to 416.3 million barrels, as per official data. Analysts had expected a drop of 317,600 barrels.
Stefano Grasso from 8VantEdge in Singapore said, “Stocks are falling, but demand remains high. Still far away is a price that would kill the market.
Also Read: Steady Oil Prices China Supply-Cuts: OPEC+ Moves Offset by Beijings Economic Stagnation
Last week, a significant 943k barrel drop at the Cushing storage hub impacted U.S. crude prices. It has less than 21.78 million barrels, the lowest amount since July 2022. Concerns have been raised about the oil’s quality and its potential inability to function properly. This drop is due to the high demand for exports and processing.
Saudi Arabia and Russia, key OPEC+ members, will reduce oil production by 1.3 million barrels per day until year-end. This is in addition to the existing oil cuts.
Nikolai Shulginov, Russia’s energy minister, says no gasoline shipments are possible. This ban will likely remain until the local market normalizes.
Sugandha Sachdeva, the Executive Director of Acme Investment Advisors, was concerned about prolonged high-interest rates in the U.S. He said this could dampen excitement and restrict prices soon despite Brent prices nearing the desired $100 per barrel mark.
Our Reader’s Queries
Why has the price of oil going up?
According to Rob Thummel, managing director at Tortoise Capital, the recent events in the Red Sea are heightening geopolitical risk. As a result, oil prices are on the rise as traders evaluate the possibility of a supply disruption due to the increased geopolitical risk.
What is the prediction for oil prices?
According to a note from the Wall Street bank on Sunday, the global oil benchmark, Brent, is expected to average $81 a barrel in 2024. This is a decrease from the previous estimate of $92 a barrel. The bank also predicts that Brent will reach its peak at $85 a barrel in June of next year.
What is the crude oil prediction for 2023?
In 2023, Brent crude oil is expected to have an average annual price of 82.4 U.S. dollars per barrel, as per a December 2023 forecast. This is a decrease of almost 20 U.S. dollars from the previous year, when energy commodity prices surged due to the Russia-Ukraine conflict.
Where are oil prices headed in 2024?
Experts are predicting that the oil prices in 2024 will hover around $90 per barrel. The U.S. Energy Information Administration (EIA) has forecasted that the global benchmark, Brent crude, will average at $93 per barrel, which is an increase from the expected average of $84 per barrel in 2023.