August 9, 2023: Oil prices eased from four-month highs as crude’s summer rally takes a breather.
International benchmark Brent futures are selling lower by 0.9% at $85.44 a barrel after achieving their highest level since April. U.S. West Texas Intermediate futures decreased 1% to $82.02 per barrel.
Despite those defeats, WTI is up 1% for August, on speed for its third straight monthly gain. In July, it rebounded over 15%.
Earlier in the session, crude rose following an attack on a critical Russian oil export hub and comprehensive production cuts by OPEC kingpin Saudi Arabia and Russia.
Over the weekend, Ukraine established a naval drone attack on Russia’s port of Novorossiysk, a critical hub on the Black Sea for Russian oil exports.
In addition, last Thursday, the world’s top oil exporter Saudi Arabia extended its voluntary crude oil work stake of a million barrels per day to the end of September. Saudi Arabia’s million barrel per day cut was implemented in July through to August, and the amount “can be extended or extended and heightened,” the state-owned Saudi Press Agency said last week.
“Now that we’ve seen supplies arrive off, I think we’ll see much higher prices,” said Josh Young, chief acquisition officer at Bison Interests, an oil and gas investment firm.
Russia, the world’s second-largest oil exporter, vowed to voluntarily trim oil exports by 300,000 million barrels daily in September on Thursday.
“I think they’re going to be quite explosive,” Young said, adding that prices will be much higher over the following five years. “We might see all time-highs and prices crash as we go through this dynamic of insufficient supply close to demand.”
Citi’s Ed Morse was slightly more upbeat about crude oil supplies after September.
Morse, global head of commodity research at the bank, says Saudi Arabia and Russian output is “conceivable to come back” in October and that oil prices will hit $90 per barrel at most this quarter.
“We just don’t see demand growth living that spectacular.
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