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Breaking News:

OPEC Lifts Production in February

Oil Closes In On $95 Per Barrel, Hitting $100 In Some Markets

The oil-price rally continued in full force on Monday, with Brent crude closing in on $95 per barrel in early afternoon trading, and some crude grades around the world topping $100. 

At 12:23 p.m. ET on Monday, Brent crude was trading at $94.53, while WTI was trading at $91.81. 

Elsewhere, Reuters reported that Nigerian Qua Iboe crude rallied past $100 per barrel on Monday, while Malaysian Tapis crude had already surpassed that mark last week, citing Swedish bank SEB analyst Bjarne Schieldrop as saying in a report that “Saudi Arabia and Russia are in solid control of the oil market”. 

Oil is now at its highest price this year, with investors banking on tight supply and excess demand in the final quarter of the year as a result of production cut extensions by both Saudi Arabia and Russia, the two largest producers in OPEC+. 

The Swedish bank analyst also predicted that Brent would rise above $100 because a rally to that point would require nothing more than “noise”. 

Schieldrop said dated Brent is highly likely to move above $100 as "only noise is needed to bring it above." Swiss bank UBS sees Brent futures reaching triple digits. 

Swiss UBS sees Brent trading in the $90-$100 range, targeting $95 at year-end, while Standard Chartered analysts forecast $93 per barrel, but are not ruling out a Q4 rise above $100. 

CitiGroup cautioned on Monday that while geopolitics could move prices past $100 in the short-term, “$90 prices look unsustainable” and a withdrawal from the rally is expected as supply builds. Citi noted that non-OPEC supply is expected to increase by 1.8 million barrels per day this year and another 1 million bpd in 2024, with the U.S. set to add 900,000 bpd this year and 400,000 bpd next year, Bloomberg reports

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By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on September 18 2023 said:
    Brent crude is now on an upward trajectory that will take it to $100 a barrel and beyond soon.

    And contrary to the claim by the Swedish bank SEB analyst Bjarne Schieldrop, a rise to $100 could never be driven by ‘noise’ but by robust oil demand aided by resurgent Chinese economy and a tightening market.

    Experts and analysts alike should wake up and accept that the Saudi voluntary production cut has nothing to do with the market and everything to do with Saudi production difficulties. Reduced Saudi production could become a permanent feature of the market.

    As for Russia’s export cut, it has virtually no impact on the market. Russia is benefiting from a higher tax on domestic petroleum products causing demand to decline and enabling it to maintain its exports at pre-cut level.

    And to complicate matters further, neither OPEC+ is capable of lifting its production significantly nor are non-OPEC producers such as the United States, Norway, Brazil and others in a position to do so either.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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