In an unexpected turn of events on Wednesday, September 13th, crude oil contracts took a nosedive as the United States revealed that crude oil stocks had surged, defying earlier predictions. This revelation has cast a shadow over the otherwise positive trends in the world oil supply.
WTI crude futures saw a drop of 32 cents, equivalent to 0.4%, settling at $88.52 per barrel. Similarly, BRENT crude futures experienced an 18-cent decrease, representing a 0.2% decline, to close at $91.88 a barrel.
The U.S. Energy Information Administration (EIA) delivered the surprising news, reporting a 4 million barrel increase in U.S. crude oil stocks over the past week. This starkly contrasted with analysts’ earlier forecasts, which had anticipated a 2 million barrel decrease.
The unexpected increase was not limited to crude oil stocks; gasoline stocks also surged by 5.6 million barrels, diverging from the anticipated decline of 1.4 million barrels. Distillate stocks, encompassing heating oil and diesel, followed suit by rising 3.9 million barrels, a stark contrast to analysts’ expectations of a stagnant figure.
This unforeseen rise in crude oil stocks has eclipsed the positive factors stemming from the tight oil supply trend observed in the global market. Recent actions by key players in the oil industry had initially indicated a more favorable outlook. Saudi Arabia extended its voluntary oil production cut of 1 million barrels per day until the year’s end, and Russia similarly prolonged its reduction of oil exports to 300,000 barrels per day, extending until the end of the year.
Moreover, the Organization of Petroleum Exporting Countries (OPEC) has foreseen robust growth in global oil demand for the years 2023 and 2024, bolstered by promising signs of economic recovery in major economies. These projections persist in the face of various challenges such as rising interest rates and inflation.
OPEC’s outlook predicts a considerable surge in global oil demand, with an estimated increase of 2.44 million barrels per day in 2023 and an additional 2.25 million barrels per day in 2024. The driving force behind this growth is the continuous expansion of the global economy, notably within the tourism and air travel sectors. This resurgence is poised to push oil demand in 2023 to levels exceeding those seen prior to the COVID-19 pandemic outbreak.
The Spot Market is Open
Thursday, September 14, 2023
| Energy Updated at | USD Price | Change | %Change |
| Crude Oil 11.15 | 88.95 | +0.43 | +0.49% |