The rise in oil prices continued on Thursday after prices soared on Wednesday evening. The barrel of Brent from the North Sea is approaching 100 dollars. Black gold is currently trading at levels not seen in almost a year.
Thursday morning, around 7:40 a.m., a barrel of Brent for delivery in November was trading at $97.38, recording an increase of 0.86%. The evening before, it had already taken off, increasing by 2.75% to reach 96.55 dollars. Meanwhile, the equivalent US contract, West Texas Intermediate (WTI), settled at $94.44, up 0.83%, after gaining 3.63% on Wednesday evening for the first time since late August 2022.
The bullish momentum intensified after the release of the report from the US Energy Information Administration (EIA), which noted an unexpected drop of 2.2 million barrels in crude inventories during the week ending September 22. This reduction far exceeded the forecasts of analysts who were counting on a decline of 900,000 barrels, according to a consensus established by the Bloomberg agency. This news reinforced concerns about the oil supply.
The oil market faces a tightening global supply as Saudi Arabia and Russia, two major OPEC members, extended production cuts until the end of the year. Additionally, the Russian government has announced plans to restrict fuel exports and increase export duties for resellers.
Still, some traders were perplexed by the content of the EIA report, as several elements should have led to an increase in US crude oil reserves. For example, activity at refineries, the main consumers of crude oil, fell sharply, with the utilization rate falling to 89.5%, the lowest in six months. In addition, crude oil imports increased sharply (+11%) in one week, reaching their highest level at this time of year in five years. As for exports, they fell by 21%, which should have encouraged an increase in stocks in the United States.
Despite this confusing data, speculative traders appear to be focused solely on declining stocks, thereby strengthening their long positions. The market is also closely watching reserves at Cushing, Oklahoma, the main WTI delivery terminal in the United States, which have fallen to their lowest level in 15 months.
According to experts, the crossing of the symbolic threshold of 100 dollars per barrel for Brent seems inevitable, marking a new stage in the skyrocketing price of oil. The market is clearly in motion.
