Oil prices rose, reaching the highest level in 10 months, above $92 a barrel, amid expectations that they will exceed $100 by the end of this year, as expectations of a reduction in global supplies overshadowed fears of a slowdown in demand in some countries such as China.
Brent crude futures rose 0.4% to $92.44 per barrel, while US West Texas Intermediate crude rose 0.55% to $89.34 per barrel.
Brent crude futures had reached about $93 per barrel by 1006 GMT, while West Texas Intermediate crude reached $89.5.
The two benchmarks rose by about 2% in Tuesday’s session, closing at their highest levels since November 2022.
The US Energy Information Administration said on Wednesday that US oil inventories rose for the first time in 5 weeks last week, by about 4 million barrels, to reach 420.6 million barrels, compared to analysts’ expectations in a Reuters poll for a decline of 1.9 million barrels. Gasoline and distillate stocks also increased.
The Organization of the Petroleum Exporting Countries (OPEC) has stuck to its expectations of strong growth in global oil demand in 2023 and 2024, attributing this to indications that the major economies are performing better than expected despite negative factors such as high interest rates and high inflation.
Satoru Yoshida, a commodity analyst at Rakuten Securities, said, according to Reuters: “Positive expectations for demand from OPEC and the US Energy Information Administration’s predictions of a decline in global oil inventories have strengthened market views about tight supplies in the future.”
Al-Omran United Company for Marine and Logistics Services said that 4 major oil ports in Libya were reopened after their closure on Saturday, following a strong storm that swept the country and killed thousands. It added that the ports of Brega, Sidra and Ras Lanuf in the east of the country opened on Tuesday evening, while the port of Zueitina opened on Wednesday morning.
Analysts said that had it not been for the reopening of Libyan ports, oil prices would have jumped to approximately $95 per barrel.
In this context, analysts at Bank of America Global Research believe that OPEC+ maintaining the current supply cuts until the end of the year, in addition to the optimistic scene regarding the strength of demand in Asia, may push the price of Brent crude to exceed $100 a barrel before… 2024.
Bank of America said in a note dated September 12 that Asia is leading the growth in global energy demand, and China continues to enhance its oil reserves to keep pace with its dependence on imports.
Meanwhile, the Izvestia newspaper reported, citing Russian Energy Minister Nikolai Shulginov, on Wednesday, that he expects Russian oil production to decline by 1.5 per cent to reach 527 million tonnes (10.54 million barrels per day) this year from 535 million in 2022.
Russia, the second largest oil exporter after Saudi Arabia, has stopped or postponed the publication of some key energy data, including information on production and exports, since it began its military operation in Ukraine last year.
Analysts say the lack of transparent official data from one of the world’s largest oil producers makes monitoring global supplies and analyzing markets more difficult.
Russia has publicly pledged to voluntarily reduce its oil production by 500,000 barrels per day, or about 5 per cent of its production since March, in an effort to control oil markets.
