Bullish oil hits the headlines: is there a rally in the making?
By Paul Reid
07 August 2023
In this article, we will cover Exness opinions alongside reporting from the Wall Street Journal, which is a commercial partner of Exness.
It’s been a wild week for oil prices. Saudi Arabia extended its production cut of 1 million barrels per day (bpd) into September. As a result, a recent poll by the Wall Street Journal now suggests that Brent crude should hit an average of $87 (USD) per barrel in Q3 and remain stable until Q2 2024.
Saudi Arabia also admits to working on building up its oil reserve. By further limiting oil availability beyond the known production cuts, prices may react even more bullish in the medium term.
Another factor influencing oil prices is the increase in offshore drilling. In July, Wood Mackenzie reported that deepwater drilling is on the rise as companies explore more offshore opportunities.
Also notable are the US Energy Information Administration (EIA) projections that shale oil production will decline in Q3 after hitting a July high. The recent decline to 9.4 million bpd, should increase demand for Brent.
Overall, oil is already bullish but nowhere near the upper range of 2023, which is still low compared to 2022’s $126 high. Don’t be surprised if the $85-$90 range is breached.
The Russia-Ukraine conflict continues to make an impact on oil distribution, and The Wall Street Journal has its finger on that pulse. Here’s what The Wall Street Journal is reporting about oil.
Oil Muted After Ukraine Attacks Russian Oil Tanker
UPDATED AUG 07, 2023 04:02 AM EDT
0747 GMT – Oil prices hovered close to their highest level since mid-April as investors weighed the impact of a Ukrainian attack on a Russian-flagged oil tanker. Brent crude oil inches down less than 0.1% to $86.20 a barrel while WTI declines 0.8% to $82.75 a barrel. Over the weekend, a Ukrainian naval drone damaged an oil tanker that had been sanctioned by the U.S. for working with the Russian military while Ukrainian officials said that Russian Black Sea ports should be considered subject to “military threat.” The attacks could threaten a new risk to Black Sea commodity flows and boost shipping insurance rates in the region.
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Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.
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