The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil increased by $8.04 (+9.9%) to $89.43/barrel in September. That advance occurred within the context of a somewhat stronger U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of July’s decrease of 592,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.1 million b/d), and accumulated oil stocks that continued trending downward below the midpoint of the five-year average range (September 2023 average: 417 million barrels).
Selected
highlights from the 29 September 2023 issue of OilPrice.com’s Oil &
Energy Insider include:
“The expiry of November ICE Brent futures has seen backwardation between the expiring month and the December contract shoot up to a whopping $2 per barrel,” wrote OilPrice.com’s Michael Kern. “At the same time, despite some very bullish news this week, ranging from wafer-thin Cushing stocks to an improving macro outlook in China, oil prices have been rangebound lately as crude remains overbought and any surge above $95 per barrel triggers resistance. With OPEC+ meeting next week on October 4, focus will now move back to Saudi Arabia and the future of its production cuts.”
Strained
Cushing Stocks Stoke Fears of Shortages.
As crude inventories at the key US storage hub of Cushing, Oklahoma fell to
their lowest since July 2022, at 22.0 million barrels, operators are fearing
operational risks as oil becomes difficult to remove if tank storage holds less
than 20 million barrels.
Biden’s 5-Year Offshore Plan Sees No Leases Next Year. The Biden administration’s five-year plan for offshore oil and gas leasing does not include any auctions to be held in 2024 and features only three in the subsequent years of 2025-2028, marking the lowest leasing activity since at least 1992.
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.
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