• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 6 days The United States produced more crude oil than any nation, at any time.
  • 7 days How Far Have We Really Gotten With Alternative Energy
  • 10 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 9 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 10 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.

Brent Oil Price Rises Above $80 Per Barrel As Supply Tightens

Brent crude has climbed above $80 a barrel for the first time since early May, a sign that supply is gradually tightening and demand growing. The oil prices gains came despite data showing U.S. crude inventories jumped by nearly 6 million barrels last week with traders focusing on surging domestic demand during the summer driving season.

The latest oil price rally comes after Saudi Arabia, for the second month running, extended its voluntary 1M bbl/day oil production cut for another month, this time till August. The reduction will take the country’s production to ~9M bbl/day, the lowest level in several years. The Kingdom has been single-handedly sacrificing sales volume in a bid to goose weak oil prices, but has so far reaped little reward, thanks to increased supply by non-OPEC producers including the United States.

The Energy Information Administration has reported that U.S. crude oil production is on track to set a record this year, up 9% Y/Y through April. EIA has forecast total U.S. output will hit 12.61M bbl/day in the current year, above the previous record of 12.32M bbl/day set in 2019 and easily beating last year's 11.89M bbl/day. Although OPEC and its allies have announced cuts amounting to ~6% of 2022's production, Rystad Energy estimates output in countries outside OPEC is making up for about two-thirds of those reductions, frustrating OPEC’s efforts to goose prices.

Meanwhile, heavy trading in Dubai oil has lifted its premium to WTI crude to its highest since late March, a development that could make U.S. crude even more competitive in Asia. More traders have turned to Dubai after Persian Gulf producers such as Saudi Arabia hiked prices and shipping rates also climbed.

Bloomberg has reported that Dubai swaps were trading at a premium of $3.65 a barrel above U.S. benchmark West Texas Intermediate futures in Singapore, with the spread usually smaller than $3. Increased trading of partials--smaller lots that are accumulated and converted into physical cargoes--is also giving a boost to Dubai oil prices. Asian exports of U.S. crude have been climbing with buyers returning after months of scooping up cheap Russian barrels.

Dubai oil is considered a proxy for other regional grades.

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Mamdouh Salameh on July 12 2023 said:
    This could be due to the following bullish factors:

    1- Rising growth rates, minimal inflation and surging oil demand in the China-led Asia Pacific region are now going at full blast.

    2- The market fundamentals are at last overpowering fears of US banking difficulties or Federal Bank hikes causing more collapses among American banks.

    3- The global oil market is tightening and could soon become imbalanced.

    If the price rally strengthens further, prices could recoup their losses in no time and resume their surge with Brent crude headed towards $90-$100 a barrel before the end of the year.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News