Brent Price Rises To $92.88 On Supply Concern

Oil prices showed marginal increases during the week due to tight supply concerns driven by OPEC+ group’s output cut decision, upcoming European Union (EU) sanctions and the decline in US crude stocks.

International benchmark Brent crude traded at $92.88 per barrel on Friday, rising by 1.3% from the opening price on Monday of $91.71 a barrel.

American benchmark West Texas Intermediate (WTI), trading at $85.02 per barrel at the same time, saw a 0.5% rise compared to Monday’s opening at $84.63 a barrel.

The easing of the US dollar exchange rate, making dollar-indexed crude oil more affordable for buyers, and strong demand expectations in China, driven by the country’s loose monetary policy and supportive policies toward the energy sector, helped oil prices start the week on a positive note.

The decision by the OPEC+ oil producer group to cut production by 2 million barrels per day (bpd) has heightened demand concerns in support of higher prices. READ: Brent Price Hits $96 after IEA Demand Forecast

The upcoming EU sanctions on Russian oil and gas exports, which are set to begin on Dec. 5, will add to market supply pressure.

Under the sixth set of sanctions, EU leaders decided in early July to cut Russian oil imports by 90% by the end of the year. The strategy calls for phasing out Russian crude oil shipments by Dec. 5 and refined product deliveries by Feb. 5.

An estimated decline in US crude stocks also sent prices on an upward trajectory by midweek, indicating a rebound in demand in the country.

The American Petroleum Institute (API) forecasted late on Tuesday a fall in US crude oil inventories of 1.3 million barrels, exceeding market expectations of a 1.55 million-barrel increase.

The Energy Information Administration data supported the API’s projection late Wednesday when it announced that US commercial crude oil inventories fell by 1.7 million barrels to 437.4 million barrels during the week ending Oct. 14.

Meanwhile, the US revealed plans to release more oil from its emergency oil reserves by the end of the year in a bid to combat high prices at the pump. US President Joe Biden said 15 million barrels of oil would be offered from the Strategic Petroleum Reserve.