LONDON – With oil investors and traders focus on one oil– an increase in prices which came close to 100 dollars per barrel, certain qualities of crude oil are already trading above this mark, highlighting the expectation of tight supply.
The price of Nigerian crude oil Qua Iboe exceeded $100 per barrel on Monday, according to LSEG data. Malaysian crude Tapis hit $101.30 last week, Bjarne Schieldrop, an analyst at Swedish bank SEB, said in a report.
Oil hit its highest level in 2023 as investors focus on the prospect of a supply shortfall in the fourth quarter after Saudi Arabia and Russia extended supply cuts. These two countries are the largest producers in the OPEC+ group, most of whose other members are also reducing production.
“The general situation is that Saudi Arabia and Russia are firmly in control of the country. oil market,” Schieldrop said.
Brent oil Futures, a global benchmark, were trading as high as $94.89 on Monday and the associated benchmark used for trading much of the world’s physical cargo, called Dated Brent, was just above 96 dollars according to LSEG.
Qua Iboe and some other crudes priced to Brent are already above $100 because they are based on the price of dated Brent plus a differential or cash premium, currently valued by LSEG at around $4.25 per barrel.
Schieldrop said dated Brent is very likely to rise above $100 because “only noise is needed to drive it above.” Swiss bank UBS predicts Brent futures will reach triple digits.
“We expect Brent to trade in a range of $90 to $100 over the coming months, with an end-year target of $95,” said Giovanni Staunovo, an analyst at UBS.
To subscribe to APPLICANT MORE to access The Philippine Daily Inquirer and over 70 other titles, share up to 5 gadgets, listen to news, download as early as 4 a.m. and share articles on social media. Call 896 6000.
For comments, complaints or inquiries, Contact us.