Crude oil futures saw a robust surge on Thursday, September 14, as they vaulted above the pivotal $90 threshold, marking their highest levels since November 2022. This surge can be attributed to the prevailing trend of constrained oil supplies on the global stage.
In a notable ascent, WTI crude futures climbed by $1.64, representing a substantial 1.85% gain, ultimately closing at $90.16 per barrel. This closing price has not been witnessed since November 7, 2022. Simultaneously, BRENT crude oil futures registered an impressive increase of $1.82, equivalent to a 1.98% uptick, concluding at $93.70 per barrel, marking the highest closing level since November 15, 2022.
The International Energy Agency (IEA) has offered a significant projection, foreseeing that Saudi Arabia will persist with its voluntary oil production cuts, amounting to 1 million barrels per day, until the culmination of this year. Furthermore, Russia has extended its oil export reduction by 300,000 barrels per day, similarly maintaining this measure until the year’s end. These collective actions are poised to uphold the tightness within the global oil market well into the fourth quarter of this year.
The IEA’s outlook aligns with recent reports from the Organization of the Petroleum Exporting Countries (OPEC), which have underscored the robust expansion of global oil demand, both in the present year and the following. Consequently, it is anticipated that the world oil market will continue to operate in a constrained state throughout this year if oil-producing nations continue to curtail their production capacities.
OPEC projects that global oil demand in 2023 will surge by 2.44 million barrels per day, with an additional increase of 2.25 million barrels per day anticipated in 2024. This surge in demand is attributed to the sustained growth of the global economy, particularly bolstered by the recovery in the tourism and air travel sectors. It is foreseen that oil demand in 2023 may even surpass the levels observed before the onset of the COVID-19 pandemic, underlining the resilience and dynamism of the oil market in response to changing global dynamics.
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Friday, September 15, 2023