September 2022 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil slid by $9.41 (-10.0%) to $84.26 per barrel in September. That decrease occurred within the context of a noticeably stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of July’s decrease of 428,000 barrels-per-day (BPD) in the amount of petroleum products demanded/supplied (to 20.3 million BPD), and accumulated oil stocks that finally exceeded year-earlier levels (September average: 429 million barrels). 

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Selected highlights from the 30 September 2022 issue of OilPrice.com’s Oil & Energy Insider include:

It is not unusual to see oil prices spike in late September as hurricanes ravage the U.S. Gulf of Mexico, yet, despite the horrendous damage done to Florida and other south-eastern states, Hurricane Ian has failed to become a notable factor for crude. And whilst some pricing upside came from U.S. stock draws, a new batch of Iranian sanctions, and marginal weakening of the U.S. dollar, the next big catalyst for oil prices will be the OPEC+ meeting taking place on October 5th. With production cuts being discussed as a means of maintaining palatable prices, an upward run towards $100 per barrel might be on the cards for ICE Brent.

OPEC+ Seems to Be Serious About Cuts. According to OPEC+ sources, members of the oil group have started talks about potential oil production cuts in November 2022 as Russia has already suggested a 1 million b/d target reduction for the October 5th meeting. (Ed. note: OPEC+ agreed to a 2 million BPD production cut.)

Russia Calls Nord Stream Leaks State-Backed Terrorism. After four separate leaks in the Nord Stream 1 and 2 pipelines continue to spout methane into the Baltic Sea, Russia's government called the still unidentified attacks an act of "state-sponsored terrorism", a thinly veiled allusion to the U.S.

EU Finalizes Eighth Batch of Russia Sanctions. The European Commission has formally proposed an eighth round of sanctions against Russia, with new measures ranging from individual blacklisting, further restrictions on technology exports as well as a ban on EU citizens sitting on boards of Russian companies.

U.S. Slaps Further Sanctions on Iran Oil Trade. The Biden Administration targeted 6 companies in India, Hong Kong, China, and the UAE for allegedly enabling the sale of Iranian crude and products into South and East Asia, as most Iranian exports still sail towards Chinese buyers.

IEA Warns of LNG Tightening in 2023. The head of the International Energy Agency (IEA) Fatih Birol warned that LNG markets in 2023 might be even tighter this year amidst higher demand from China, India, and other parts of Asia, as stronger Asian growth ramps up the need for more gas.

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For other oil-related headlines, see the 3 October 2022 edition of The Energy Bulletin Weekly.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.