Oil prices of benchmark grades remain in the plus on Wednesday afternoon after the release of the monthly report of the International Energy Agency (IEA) ahead of the publication of official data on oil inventories in the United States. Quotes for November Brent crude oil futures on the London-based ICE Futures exchange at 14:47 Q4 are trading at $92.54 per barrel, up $0.48 (0.52%) from the previous session’s close.
WTI crude oil futures for October on the electronic trading of the New York Mercantile Exchange (NYMEX) rose by $0.48 (0.54%) to $89.32 per barrel by the indicated time.
The expected growth in global oil demand by 1.5 million bpd in the second half of 2023 compared to the first half of the year will outstrip supply by 1.24 million bpd, according to the IEA report.
The agency estimates that the world oil market balance turned into a deficit in the third quarter as more active supply cuts coincided with record high demand.
Thus, the IEA estimates a deficit of 1.5 million b/d in July and 1.7 million b/d in August, the highest since 2021, when a record OPEC+ supply cut was implemented to reduce the surplus accumulated during the COVID-19 pandemic.
In the first quarter of 2023, the IEA estimated an oil market surplus of 1.5 million bpd in the first quarter and 80,000 bpd in the second quarter.
The U.S. Department of Energy at 17:30 Wednesday will publish a weekly report on commercial stocks of oil, gasoline and distillates in the country. The data of the American Petroleum Institute (API) released the day before showed an increase in oil reserves by 1.174 million barrels at the end of the week ended September 8.
Oil prices continue to rise on Tuesday afternoon, with traders waiting for new signals on supply and demand in the market.
Their attention is focused on the monthly reports of OPEC and the International Energy Agency (IEA), which will be published on Tuesday and Wednesday, respectively.
In addition, the American Petroleum Institute (API) on Tuesday, at 23:30, will publish data on oil reserves in the country for the week ended September 8. The market on average expects a decline in reserves by 2 million barrels after a drop of 5.5 million barrels a week earlier, Trading Economics notes. The Energy Ministry will release official data on Wednesday.
The cost of November futures for Brent oil on the London ICE Futures exchange by 14:42 by the end of the quarter is $91.25 per barrel, which is $0.61 (0.67%) higher than at the close of the previous session.
October futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) have risen by $0.71 (0.81%) to $88 per barrel by this time.
The actual selling price of oil and condensate used in determining the royalty for subsoil use in August 2023 amounted to UAH 19,775/tonne, which is 15.1% more than in July (UAH 17,178/tonne). The relevant data is published on the website of the Ministry of Economy of Ukraine.
As reported, in January 2023, the actual selling price amounted to UAH 13,297/tonne, in February – UAH 13,251/tonne, in March – UAH 12,522/tonne, in April – UAH 15,515/tonne, in May – UAH 14,158/tonne, in June – UAH 14,673/tonne, in July – UAH 17,178/tonne.
Oil prices steady after rising to highest since November, Brent above $90 per barrel
Oil prices were stable on Wednesday after rising to their highest levels since November last year on information about Saudi Arabia’s plans to extend voluntary production cuts until the end of 2023.
The cost of October futures for Brent on the London ICE Futures exchange at 8:10 a.m. on Wednesday is $90.03 per barrel, which is $0.01 (0.01%) lower than the price at the close of the previous session. On Tuesday, these contracts rose by $1.04 (1.2%) to $90.04 per barrel, the highest since November 16.
The price of October futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.03 (0.03%) to $86.66 per barrel. As a result of the previous trading, the value of these contracts increased by $1.14 (1.3%) to $86.69 per barrel, the highest value since November 15.
Saudi Arabia will continue to voluntarily reduce oil production by 1 million bpd until the end of 2023, the kingdom’s state agency reported on Tuesday, citing an official source in the Ministry of Energy.
“Further supply constraints will support oil prices,” analysts at ANZ Group Holdings Ltd. said in a research note. “We are likely to see a significant reduction in oil inventories as a result of these restrictions.
The price of Brent crude oil jumped above $90 per barrel in trading on Tuesday after information emerged about Saudi Arabia’s plans to extend its voluntary production cuts until the end of 2023.
The cost of November futures for Brent on the London ICE Futures exchange at 16:35 on Tuesday is $90.5 per barrel, which is $1.5 (1.69%) higher than the price at the close of the previous session.
The price of October futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) has risen by this time by $1.81 (2.12%) to $87.36 per barrel.
Saudi Arabia will continue to voluntarily reduce oil production to 1 million bpd by the end of 2023, the kingdom’s state agency said, citing an official source in the Ministry of Energy.
Before this information was released, Brent was trading at around $88.4 per barrel, WTI at around $85.3 per barrel.
The actual level of oil production in Saudi Arabia is expected to reach 9 million bpd by the end of this year, the report emphasizes. “The voluntary decision to reduce oil production will be reviewed monthly with the possibility of reducing or increasing production,” the statement said.
This reduction is in addition to the 500 thousand bpd production cut announced in April, which will last until the end of 2024.
According to the source of the kingdom’s state agency, these steps are aimed at strengthening the precautionary measures taken by OPEC+ to maintain stability and balance in the oil markets.
Benchmark oil prices are moving mixed near multi-month highs on Tuesday morning.
The price of November Brent futures on London’s ICE Futures exchange is at $88.87 a barrel by 8:29 a.m. Q2, down 13 cents (0.15%) from the previous session’s close. On Monday, these contracts rose by $0.45 (0.5%) to $89 per barrel.
Quotes of futures for WTI crude oil for October at the electronic trading of the New York Mercantile Exchange (NYMEX) by the specified time rose by 32 cents (0.37%) and amounted to $ 85.87 per barrel. On Monday, the main trades were not held due to a day off in the U.S. (Labor Day).
Prices are supported by expectations of the extension of production reduction measures by OPEC+ countries.
Saudi Arabia is also expected to extend the voluntary production cut by 1 million barrels per day for October.
At the same time, traders regard the signs of possible cooling of the American economy as a reason for the end of the cycle of interest rate hikes by the Federal Reserve, which also strengthens market optimism.
An additional positive factor is the news of an unexpected increase in activity in the manufacturing sector of the Chinese economy. The Purchasing Managers’ Index (PMI) in China’s manufacturing sector in August hit its highest level since February, Caixin Media Co., which calculates the indicator, said on Friday. The index rose to 51 points from 49.2 in July. The consensus forecast, cited by Trading Economics, called for a rise to 49.3 points. A value above the 50-point mark indicates an increase in activity in the sector.
