Crude oil contracts took a downward turn on Tuesday, September 19th, as investors opted to capitalize on gains following a notable three-day surge. This price retreat followed an announcement that Saudi Arabia and Russia would extend oil supply cuts until the end of the year.
In the realm of West Texas Intermediate (WTI) crude futures, prices dipped by 28 cents, or 0.3%, concluding at $91.20 per barrel. Simultaneously, BRENT crude futures experienced a slight reduction of 9 cents, equivalent to 0.1%, with a closing figure of $94.34 per barrel.
In the initial trading session, WTI oil prices exhibited considerable strength, surging by more than 1% and surpassing the $92 threshold. Likewise, Brent crude prices ascended beyond $95, underpinned by the promising outlook of constrained oil supplies, prompted by Saudi Arabia and Russia’s decision to prolong their collective oil supply cuts, which amount to 1.3 million barrels per day, until the year’s end.
However, the momentum in WTI and Brent oil prices tapered off as the session progressed, as profit-seeking investors entered the market to capitalize on the recent gains.
Nevertheless, analysts at UBS Bank offer a cautiously optimistic outlook, predicting that Brent oil prices will fluctuate within the range of $90 to $100 per barrel in the months ahead. On the other hand, analysts from Citigroup express a more bullish perspective, projecting that Brent oil prices could surge past the $100 per barrel mark by the end of the year.
In terms of inventory dynamics, the American Petroleum Institute (API) reported a substantial reduction of 5.25 million barrels in U.S. crude oil inventories for the week concluding on September 15th. This figure surpassed analysts’ expectations, which had predicted a more modest decrease of 2.7 million barrels.
Investors are now keenly awaiting the official release of crude oil stock figures from the United States government’s Energy Information Administration (EIA). This data is set to be disclosed today, September 20th, at approximately 9:30 p.m. Thai time. As market participants digest these critical inventory statistics, the trajectory of oil prices in the near term will likely hinge on their implications for the supply-demand balance in the global oil market.
The Spot Market is Open
Wednesday, September 20, 2023