Oil prices jump to nearly 10-month high on Libyan flood
2023-09-13
Summary:
Oil prices edged higher on Wednesday after surging nearly 2% to close at their highest levels since November 2022 on Libyan supply jitters.
Oil prices edged higher on Wednesday after surging nearly 2% to close at their highest levels since November 2022 on Libyan supply jitters.
At least 2,000 people have died and 10,000 in the country are believed missing following the deadly flooding that broke dams and swept away countless homes there.
OPEC maintained for robust growth in global oil demand in 2023 and 2024, citing signs that major economies are faring better than expected despite headwinds such as elevated inflation.
The EIA said global oil inventories were expected to decline by almost a half million bpd in the second half of the year. It expected Brent to average $93 in the fourth quarter.
U.S. crude oil stockpiles rose by 1.2 million barrels in the just-ended week, the biggest gain in five weeks, according to a report by API. Analysts expected a draw of about 1.9 million barrels.
Meanwhile US shale firms has not been complacent amid oil boom. Baker Hughes has estimated a loss of 147 active drilling rigs so far this year. The market players are willing to spend more profit on dividends and share buyback.
The limelight will be firmly on the US CPI which will offer latest clues on inflation dynamics. Core CPI is seen cooling to 4.3% year-on-year in August from 4.7%, but rising energy costs dent the Fed’s efforts to tame rising prices.
Money managers hold the biggest net long position in WTI in 15 months, while they also added to bets for gains in Brent last week. Even so traders see a potential pullback as technical indicators suggest overbought conditions following a surge.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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