Crude oil futures rose to a 2023 high on Friday (4th), their sixth consecutive week of gains, as both Saudi Arabia and Russia will extend the implementation period of their production cut plans.
Energy commodity prices West Texas Intermediate crude (WTI) futures for September delivery rose $1.27, or 1.6%, to settle at $82.82 a barrel, up 2.8% for the week. delivery in octoberBrent Crude Oil (Brent) futures rose $1.10, or 1.3%, to $86.24 a barrel, up 2.2% for the week. Gasoline futures for September delivery rose 0.7% to settle at $2.783 a gallon, after falling 3.6% for the week. Delivered in SeptemberHot Fuel FuturesPrices fell 0.4 percent to $3.062 a gallon, having gained 3.8 percent for the week. Natural gas futures for September delivery fell 0.3% to settle at $2.557 per million Btu, down 3.1% for the week.market drivers
Both WTI and Brent closed at their highest levels since April 12. Crude oil rose for the week, regaining the ground lost on Wednesday. The sharp drop on Wednesday was because Fitch downgraded the US sovereign credit rating from AAA to AA+, which weakened market sentiment.
Saudi Arabia said on Thursday that its plan to cut production by 1 million barrels per day will be extended until the end of September, and the cuts may be extended or deepened. After the announcement, oil prices regained their footing.
Russia also indicated that the measure to cut crude oil exports by 300,000 barrels per day will be implemented until the end of September.
OPEC+’s Joint Ministerial Monitoring Committee (JMMC) recommended on Friday, as expected, no change to OPEC’s output levels.
Edward Gardner, a commodity economist at Capital Economics, pointed out that since OPEC+ implemented the current production reduction measures in July, the price of Brent oil per barrel has risen by about US$10, while the production quotas of the 10 members of OPEC+ have increased from 23.4 million per million barrels in June. The drop to 22.6 million barrels in July was the main result of Saudi Arabia’s plan to cut production by 1 million barrels per day.
With OPEC+ appearing committed to limiting supply, Brent is expected to end the year at $85 a barrel and global oil demand will grow 2% annually in the second half of the year, Gardner said.
However, he believes that Brent oil prices are unlikely to break above the $85 a barrel price, because the increase in global inventories in the first half of the year should make up for the supply shortage in the second half of the year. He pointed to U.S. stockpiles that are still rising so far this year, and China, which appears to have been stockpiling crude.
Oilfield services company Baker Hughes said on Friday that the number of oil rigs drilling for oil in the United States fell by four this week to 525, a decrease of 73 from a year earlier.
2023-08-04 22:03:40
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