Oil Swings on OPEC+ 2Mbpd Production Cut, US Crude Rises
Oil prices mixed over supply uncertainties in the market after the Organisation of Petroleum Exporting Countries and its allies (OPEC+) producer’s decision to cut daily oil production by two million barrels while US crude imports
International benchmark Brent crude traded at $93.22 per barrel, translating to a 0.16% drop from the closing price of $93.37 a barrel in the previous trading session. American benchmark West Texas Intermediate (WTI), trading at $87.52 per barrel at the same time, decreased 0.27% after the previous session closed at $87.76 a barrel.
The group of Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed Wednesday to cut production by 2 million barrels per day (bpd) starting November.
The group pointed to the uncertainty that surrounds the global economy and oil market outlook, and noted ‘the need to enhance the long-term guidance for the oil market.’ Following the group’s decision the US officials said on Wednesday that US President Joe Biden ‘is disappointed’ by OPEC+’s decision to cut oil production.
The decision will have the most negative effect on lower- and middle-income countries that are reeling from elevated energy prices, according to a statement by National Security adviser Jake Sullivan and top economic adviser Brian Deese.
‘At the President’s direction, the Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month, continuing the historic releases the President ordered in March,’ said the statement.
Moreover, EU countries on Wednesday reached an agreement on the eighth sanctions package against Russia. The measures include a prohibition of transporting oil to non-EU countries above a certain price, mostly affecting the shipping industry of Greece, the Greek Cypriot administration, and Malta.
The Energy Information Administration (EIA) on Wednesday showed that US commercial crude oil inventories decreased by 1.4 million barrels during the week ending Sept. 30 against the market expectation of a drop of around 1.77 million barrels.
Strategic petroleum reserves, excluded in commercial crude stocks, also fell by 6.2 million barrels, while gasoline inventories decreased by 4.7 million barrels over the same period.
US crude oil inventories were down 0.3% for the week ending Sept. 30, according to data.
US commercial crude oil inventories decreased 0.3% during the week ending Sept. 30, according to data released by the Energy Information Administration (EIA) on Wednesday. Inventories fell by around 1.4 million barrels to 429.2 million barrels, against the market expectation of a drop of around 1.77 million barrels.
Strategic petroleum reserves, excluded in commercial crude stocks, also fell by 6.2 million barrels to 416.4 million barrels last week, the data revealed. Gasoline inventories decreased by 4.7 million barrels to 207.5 million barrels over the same period.
Crude production rises
EIA data showed that US crude oil imports decreased by 502,000 barrels per day (bpd) to around 5.94 million bpd during the week ending Sept. 30, while crude oil exports fell by 95,000 bpd to 4.55 million bpd. READ: Nigerian Exchange Swings as Total Announces Interim Dividend
US crude oil production, meanwhile, increased by 2,000 bpd to approximately 12.43 million bpd over the same period.
In the September Short-Term Energy Outlook (STEO), the EIA forecasted that crude oil output in the US would average 11.8 million bpd in 2022, up from 11.2 million bpd in 2021. Crude oil output in the country in 2023 is forecast to reach 12.6 million bpd. #Oil Swings on OPEC+ 2Mbpd Production Cut, US Crude Rises
