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Expected oil supply cuts have pushed the price higher

Oil contracts traded in the commodity market on Monday, November 20, 2023, increased their price, as investors, traders and other participants in these commodity trades expect a deepening of oil supply restrictions by OPEC+, i.e. oil exporting countries, especially the Russian Federation. The OPEC+ measure aims to support oil prices, both for U.S. West Texas Intermediate (WTI) light crude and Brent North Sea crude after four weeks of declines on demand concerns and fears of supply disruptions in the Middle East due to the conflict between Israel and Hamas.

Currently, during the European Monday afternoon on 20/11/2023, at approximately 15:48 CET, the light American crude oil WTI (West Texas Intermediate) was traded on the NYMEX (New York Mercantile Exchange) commodity market at a value of USD 77.40 per barrel with with a daily growth of +1.99% of its price so far. According to technical analysis data, the current price represents a total increase of +2.71% in the price over the last 52 weeks in an annual comparison, of which, however, since the beginning of this year 2023, the price has been in a loss of -0.19 percent compared to the price at the end of last year 2022. The European counterpart of WTI oil, i.e. Brent North Sea oil, was on the ICE (Intercontinental Exchange Europe) commodity market at a value of USD 82.23 per barrel with a daily growth of +2.01% of its price so far. According to technical analysis data, the price of Brent crude oil has increased its price by +2.6% in the last 52 weeks, from which it has increased by +0.75% in its price since the beginning of this year 2023 compared to the end of last year 2022.

These oil prices on the world commodity market were achieved when the exchange value of the US dollar (USD) as the central currency of the commodity market according to the dollar index DXY (US Dollar Currency Index) showed a decrease in its point value by -0.33% at the level of points in amounting to 103.58 USD points according to this index, which compares the value of the USD with another six major world currencies. Thus, on the indicated day and time, the global currency pair of the single European currency Euro (EUR) and the US dollar (USD), as the world’s reserve currency, was traded in forex trading at a mutual exchange rate at a value of 1.093 USD per EUR with the previous daily strengthening of the EUR by + 0.22% of the exchange rate against the USD. Oil prices on the world commodity market have fallen by almost 20% since the end of September this year 2023, while the rapid month-to-month spreads in Brent and WTI last week, which is marked in the calendar of this year 2023 as the 46th in a row, slipped into contango. In the financial market, the term contango means that flash prices are lower than in future months, signaling sufficient supply.

Investors are also watching the Russian oil trade after Washington imposed sanctions on three ships that were carrying oil to India. On Friday, November 17, 2023, Moscow lifted the ban on gasoline exports, which could contribute to the global supply of motor fuel. This comes after Russia lifted most restrictions on diesel exports last month. U.S. energy companies added oil and gas rigs last week for the first time in three weeks, energy services firm Baker Hughes said on Friday. The number of oil and gas rigs serves as an early indicator of future production. Meanwhile, U.S. oil refineries are expected to take 264,000 barrels per day (bpd) offline in the week ending Nov. 24, adding 559,000 bpd to available refining capacity, research firm IIR Energy said on Monday. In the Middle East, US and Israeli officials said a deal to free some hostages held in the besieged enclave of Gaza was nearing despite fierce fighting, in a hypothetical easing of tensions, reporters said.


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