Oil Price Rally Sees WTI Top $90 - OilPrice.com
Oil Price Rally Sees WTI Top $90 | OilPrice.com
Russian Natural Gas Pipeline Catches Fire Following Blast
Saudi Arabia’s production cuts have…
Chinese imports, especially steel, are…
West Texas Intermediate (WTI) soared past $90 in Thursday morning trading, up over 30% in three months, driven by sustained OPEC+ production cuts and indications that a tighter market is coming.
At 10:51 a.m. ET on Wednesday, WTI was trading at $90.14, up $1.62 on the day for a gain of 1.83%.
WTI’s flirtation with the $90 mark comes a day after the International Energy Agency (IEA) warned that Saudi-led OPEC+ production cuts would create a “ significant supply shortfall” that would send oil prices surging amid high volatility.
More specifically, the IEA said that from this month on, OPEC+ production cuts would “drive a significant supply shortfall through the fourth quarter”.
The IEA’s forecast follows last week’s extension of production and export cuts of 1 million barrels per day by Saudi Arabia, in addition to 300,000 bpd from Russia. The cuts were extended through December this year “with the aim of supporting the stability and balance of oil markets”.
OPEC also released its monthly report this week, indicating that fourth-quarter supplies could be tighter than previously thought.
The emerging tight supply situation has also pushed Brent crude prices to over $93 per barrel. At 10:52 a.m. ET on Wednesday, Brent was trading at $93.59, up $1.71 on the day for a 1.86% gain.
Amid mounting predictions of $100 oil in the final quarter of this year, Standard Chartered said in a report earlier this week that sharp falls in inventories caused by excess demand will continue for the remainder of the year, pushing prices higher.
ADVERTISEMENT
Last week, Goldman Sachs said oil prices could hit $107 next year if OPEC+ failed to reverse course on production cuts.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Join the discussion| Back to homepage
ADVERTISEMENT
Related Knowledge Center: ENERGY BASICS: petroleum
While electric-powered vehicles may be the ride of the future, oil remains at least for now the dominant fuel for transportation around the world. And after a period of time at the end of the 20th century when oil was subject to wide fluctuations in price, new supplies in North America as a result of non-conventional recovery techniques have helped stabilize prices.