WTI crude oil soars to 13-month highs

On Thursday, WTI oil prices hit $95 per barrel, the highest they have been since August 2022.

For the first time in ten months, Brent surpassed $97.

US Energy Department data revealed a more significant decrease in inventories than anticipated, causing a rapid increase.

Demand has been strong, resulting in Cushing's oil inventories dropping to their lowest level in the past 14 months.

It appears that oil prices reaching $100 are becoming more and more likely.

Oil prices rose sharply due to dwindling reserves in the United States, as well as concerns that the Russian ban on the export of petroleum products could persist for an extended period, resulting in fuel shortages in other countries, according to RBC.

The US Department of Energy reported on Wednesday that oil inventories had decreased by 2.2 million barrels, which was more than the expected drop of 1.3 million. Despite this, production remained steady at 12.9 million bpd and net imports increased by 1.7 million b/d.

Reuters reports that market participants are worried that oil inventories at the Cushing hub, the biggest oil storage facility in the US, have dropped to their lowest point in 14 months, due to the high demand for refining and exports.

Bloomberg reported that the greater-than-anticipated decrease in stockpiles demonstrates how swiftly shortages are escalating in the market as a result of diminished supplies from Saudi Arabia and Russia.

As winter approaches, the supply of oil remains limited, causing prices to increase. To help stabilize the market, Saudi Arabia and Russia, both members of OPEC+, have agreed to reduce their production by 1.3 million barrels per day until the end of 2020.

This month, OPEC predicted a record oil shortage of 3.3 million bpd for the fourth quarter, the highest since 2007. Additionally, the International Energy Agency (IEA) reported that global oil consumption in June was the highest ever, reaching 103 million bpd.

Many market participants now believe that $100 oil is unavoidable due to the strong demand in the US and China.

Saxo Bank states that the global energy market will stay in deficit until a decision is taken to increase production.

Last week, JPMorgan predicted that Brent crude oil prices could reach $120 per barrel, which could have a negative impact on global economic growth.