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48 INTERNATIONAL AWEMainta Diabierna, 29 September 2023
Oil Prices Reach Highest Levels in
Over a Year as Crude Stocks Plummet
IN a significant development in the energy markets, oil elevated position for the remainder of the year. Moreover,
prices surged to their highest level in more than a year he sees an upside risk if the OPEC+ alliance, responsible for
during Asian trading hours. This bullish trend was driven oil supply management, continues to maintain tight control
by a noteworthy drop in crude stocks at a key storage hub, over output.
which reached their lowest levels since July of the previous Looking ahead, global oil markets are poised to experience
year. a “pretty robust deficit” on top of the significant supply
shortage that has characterized this quarter. This is largely
Data from the U.S. Energy Information Administration (EIA) due to production cuts imposed by OPEC and its allies.
revealed that crude inventories in Cushing, Oklahoma, dwin-
dled to 22 million barrels by the fourth week of September. In a significant move, Saudi Arabia, a key player in the
This figure hovers perilously close to the operational OPEC+ coalition, extended its voluntary crude oil produc-
minimum and represents a substantial decrease of 943,000 tion cut of 1 million barrels per day until the end of the year.
barrels compared to the previous week. This decision has brought Saudi’s crude output to nearly 9
million barrels per day.
The U.S. West Texas Intermediate (WTI) futures reached an Mr. Melek emphasized that while prices may continue to
impressive $95.03 per barrel during Asian trading hours, rise, particularly as they approach the $100 per barrel
marking the highest point since August 2022. As of the latest mark, OPEC has its concerns. If prices escalate significantly
data, WTI was trading at $94.61 per barrel. Simultaneously, into triple digits, long-term demand destruction becomes a
the global benchmark Brent crude registered a 1.05% worrisome consideration for the cartel.
increase, climbing to $97.56 per barrel.
In conclusion, the recent surge in oil prices has brought the
Bart Melek, Managing Director of TD Securities, attributed possibility of reaching $100 per barrel into the spotlight.
this surge to the situation in Cushing, noting that the inven- Forecasters, including Goldman Sachs, have revised their
tory levels there have reached their lowest point since July estimates, and while this bullish trend is expected to persist,
2022. He emphasized that if these levels continue to decline, the industry remains vigilant about the potential conse-
it will pose challenges in supplying crude to the market. quences of sustained high prices on global demand. OPEC’s
role in managing supply will continue to be a critical factor
Mr. Melek anticipates that oil prices will maintain their shaping the future trajectory of oil prices.
