- Crude oil prices continue the upward streak that began on September 8.
- OPEC+ supply cuts drive up oil prices.
- China’s bleak economic situation may limit the potential for oil prices.
He Western Texas Intermediate (WTI), the US crude oil benchmark, is trading higher around $91.20 during the European session on Tuesday. WTI prices continue the bullish streak that began on September 8.
Black gold prices are experiencing bullish support due to tight production prospects from Saudi Arabia and Russia. However, China’s gloomy economic situation may limit the potential of crude oil prices.
On the other hand, the International Energy Agency (IEA) reported last week that the reduction in OPEC+ oil production would create a notable supply deficit in the fourth quarter of the year, starting in September. This supply shortfall is expected to have a significant impact on the oil market, potentially causing crude oil prices to rise.
Saudi Arabia and Russia, two of the world’s largest oil exporters, have announced their commitment to extend restrictions on oil production until the end of 2023. This decision means that Saudi Arabia will reduce its oil production to about 1.3 million barrels daily (bpd) for the rest of 2023. The measure aims to support oil prices and stabilize the global oil market by limiting the supply of crude oil.
In its monthly report last week, OPEC was optimistic about oil demand in China throughout 2023. OPEC’s positive outlook extends to global oil demand, as the organization forecasts strong growth demand for both 2023 and 2024. These positive outlooks come despite challenges such as rising interest rates and rising inflation, which could impact global economic conditions.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman stressed on Monday that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are focused on maintaining stability in oil markets and improving global energy security. He stated that his goal is not to set a concrete price level for crude oil.
The US Dollar Index (DXY) extends its losing streak for the third consecutive day, trading lower around 105.00 at the time of writing. Meanwhile, US Treasury yields are recovering from losses recorded in the previous session, with the US 10-year bond yield at 4.31% at press time.
Over the next week, fundamental data will be released that could influence the price of dollar-denominated WTI oil. American Petroleum Institute (API) and International Energy Agency (IEA) Crude Oil Reserves data will be released for the week ending September 15.
Additionally, preliminary S&P global PMI data for September will be released in the United States on Friday. This data can significantly influence the price of WTI oil, and traders will closely analyze the data to identify trading opportunities in the WTI market.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
