The Current Trading Value Of Oil Is The Highest It Has Been Since 2023. It Is Uncertain Whether The Prices In The U.S. Will Escalate To $100

Oil prices have reached their highest levels this year, following the announcement that Saudi Arabia and Russia will continue production cuts until the end of the year. The extension of the output reductions is “very bullish” and means that oil supplies will continue to tighten into the end of the year, according to Phil Flynn, senior market analyst at The Price Futures Group.

The move by some of the world’s biggest oil producers may lift U.S. benchmark West Texas Intermediate crude above $100 in the months ahead, as stated by some analysts. On Tuesday, global benchmark Brent crude for November delivery traded above $90 a barrel to the highest levels year to date.

According to the country’s official press agency, Saudi Arabia will extend its voluntary cut of 1 million barrels a day to the end of the year. Russia’s Deputy Prime Minister Alexander Novak has also announced that his country will extend its additional voluntary cut in oil supplies by 300,000 barrels a day until the end of December.

The Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, did not want to “keep the drama up month after month, having the market speculate on whether they would keep production cuts in place,” according to Flynn. The three-month extension is “really sending a message that they have gained control over the market.”

While the move by Saudi Arabia may continue to support prices into year-end, some experts believe that the kingdom may not be willing to keep cutting exports and losing market share into 2024 if Brent crude remains below $90 a barrel.

The extension of the production cuts comes as demand uncertainty continues to hang over the market outlook. The Saudis’ month-to-month production cuts had been taking place during the strongest demand season of the year, but demand historically starts to decline in September and refinery turnarounds begin, lowering physical demand for crude.

‘Right move’?

It is still uncertain whether the extension of the production cut by the Saudis is the right move, according to McNally of Third Bridge.

The Chinese market is crucial in determining the future of the oil industry. Demand in China has been underwhelming for over a year now, while global inventories have moved lower as a result of output cuts and solid demand in other parts of the world, he said.

Energy equity analyst Stewart Glickman from CFRA Research thinks that the production cut extensions are the “right move if you are a producer”, but for the oil market, there are risks, including weakness in the Chinese economy or a possible U.S. recession, which would both negatively impact global energy demand.

Glickman also mentioned that there is a point where more cuts would be too much, but that point is probably if WTI prices go north of $120 [a barrel], and we’re not there yet.

Oil futures are currently experiencing backwardation, which means that futures contracts expiring in later months are trading lower than current prices. Backwardation is a “signal of greater spare capacity that could come back in the future, putting pressure on forward prices,” said McNally.

McNally also pointed out that Saudi Arabia’s production is currently at its lowest level in years to achieve the prices and balances that we are seeing today.

In the future, Saudi Arabia will “look to reclaim some [oil market] share,” implying an increase in Saudi output.

The Price Futures Group’s Flynn, however, believes that the risk of $100 a barrel by the end of the year has “gone up markedly” since the output cut announcements by Saudi Arabia and Russia.

According to Flynn, “the possibility of increasing supply draws in the coming months and the possibility that this winter might not be as warm as last could send us to that [price] mark before the end of the year.”

Flynn also states that “talk of slowing Chinese oil demand has not materialized” and for now, the trend for oil is much higher.

Brent Long (Buy)
Enter At: 91.27
T.P_1: 99.67
T.P_2: 112.47
T.P_3: 126.32
T.P_4: 139.49
T.P_5: 147.83
T.P_6: 159.51
T.P_7: 171.32
S.L: 71.44

Brent Oil


All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user.

This website and all information is intended for educational purposes only and does not give financial advice. Signal Mastermind Signals is not a service to provide legal and financial advice; any information provided here is only the personal opinion of the author (not advice or financial advice in any sense, and in the sense of any act, ordinance or law of any country) and must not be used for financial activities. Signal Mastermind Signals does not offer, operate or provide financial, brokerage, commercial or investment services and is not a financial advisor. Rather, Signal Mastermind Signals is an educational site and a platform for exchanging Forex information. Whenever information is disclosed, whether express or implied, about profit or revenue, it is not a guarantee. No method or trading system ensures that it will generate a profit, so always remember that trade can lead to a loss. Trading responsibility, whether resulting in profits or losses, is yours and you must agree not to hold Signal Mastermind Signals or other information providers that are responsible in any way whatsoever. The use of the system means that the user accepts Disclaimer and Terms of Use.

Signal Mastermind Signals is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered.

While Signal Mastermind Signals believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Mastermind Signals does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Mastermind Signals to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all.
All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Mastermind Signals assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information.

All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Mastermind Signals are not responsible for your trading in any way.

The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Mastermind Signals assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a trading account or use the services, free of charge or paid, to any of the Broker companies mentioned on this website, bears full responsibility for their actions.

Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company.

Forex/CFD trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against traders. Before each Forex/CFD investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results.
Neither Signal Mastermind Signals nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.

Translate »