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OPEC+ Cuts Offset By Booming U.S. Oil Production

OPEC+ Cuts Offset By Booming U.S. Oil Production

Despite a reduction in active…

Oil Jumps As Crude Inventories Draw

Oil Jumps As Crude Inventories Draw

Oil prices moved higher on…

Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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Oil Reaches New 2023 High

The per barrel price for the WTI grade of crude oil reached $85 on Friday—the highest price point yet this year as falling inventory levels spook the market.

WTI crude oil briefly reached $85 per barrel before sagging to $84.90 around 10:00 a.m. ET. The last time WTI traded at a level that high was November 2022.

For the day, WTI was trading up $1.33 per barrel, or 1.59%.

Brent crude oil was also trading up on the day, by $1.05 per barrel, or 1.21%, at $87.88—also a new 2023 record.

A big factor in the rising price of crude oil are the falling inventories in the United States, which dipped another 10.6 million barrels according to the Energy Information Administration for the week ending August 25.

Another contributing factor to strong oil prices is the OPEC+ alliance, which includes heavyweights Saudi Arabia and Russia. The duo has reached a deal concerning production cuts, for which Russia has said it will provide details next week. The market is weighing the likelihood that Saudi Arabia or Russia could extend or deepen their current production cuts. More analysts than not expect that Saudi Arabia will extend its 1 million bpd production cut into October.

A third support under oil prices is the weakening dollar, which makes crude oil more affordable for non-dollar holders, thereby stimulating demand.

The price rise will make it more difficult for the Biden Administration to continue the painstakingly slow process of refilling the nation’s Strategic Petroleum Reserve, which has grown by an average of 600,000 barrels per week for the last few weeks, after draining 300 million barrels out of the SPR over the last few years.

Despite the 300 million barrels leaving the SPR and going into commercial inventories, crude oil inventories—excluding that in the SPR—are more than 100 million barrels shy of July 2020 levels.

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By Julianne Geiger for Oilprice.com

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  • Mamdouh Salameh on September 01 2023 said:
    The robust fundamental of the global oil market will push Brent crude above $90 a barrel soon probably even touch $100 before the end of the year.

    The most bullish factor behind the surge of prices is China whose economy has grown most this year among the major economies and which has been the driving force behind the global economy. A case in point is that just today China issued larger-than expected fuel export quotas necessitating more crude oil imports.

    Other bullish factors are a steep fall in US oil inventories and growing concerns about imbalance in the market leading to shortages.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • George Doolittle on September 01 2023 said:
    Maybe even Venezuela can find something #constructive in this bonanza...let alone Southern California and the entire US State of Michigan.

    Not New York goes without saying of course #collapse
  • bob lemmons on September 03 2023 said:
    Brazil posts record oil and gas production
    Output totaled 4.48 million barrels of oil equivalent per day last month, data showed. Crude production alone rose by 18.6% on a yearly basis to 3.51 million barrels per day (bpd).
    Natural gas production climbed by 13.6% to 154.08 million cubic meters per day, the regulator added.
    Private oil companies will boost Brazil’s crude production by as much as 75% from 1.221 million bpd this year to 2.123 million bpd by 2030, research and consultancy group Wood Mackenzie previously predicted.

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