In the ever-fluctuating world of global commodities, oil profit has recently emerged as a headline-grabbing topic. On Thursday, September 14, 2023, oil prices surged to their highest levels this year, showcasing a remarkable rally that defied concerns over weaker economic growth and rising US crude inventories. The upward momentum in oil prices is due to output cuts by Saudi Arabia and Russia, stabilising prices until December.
Oil Prices Defy Gravity
Brent crude led the charge, ascending by $1.74, or 1.88 per cent, to reach $93.62, with a session high of $93.68 not seen since November 2022. Concurrently, US West Texas Intermediate crude (WTI) gained $1.57, or 1.8 per cent, surging to $89.09 and hitting a 10-month peak at $90.26. Remarkably, both benchmarks ventured into technically overbought territory, further reflecting the fervour surrounding oil profits.
A confluence of factors has driven this relentless ascent. One significant contributor was the extension of voluntary output cuts by oil behemoths Saudi Arabia and Russia. The joint reduction of 1.3 million bpd by the year’s end caused global crude prices to increase. The ongoing cuts, supported by OPEC+ and supplemented by these recent developments, are expected to continue until 2024.
Securing Oil Profit Amidst Volatility
These surges in oil profit are not merely a result of geopolitical decisions alone. The oil industry operates within a complex ecosystem, with Russian oil tankers, oil rigs worldwide, and the Russian oil price cap all playing integral roles in the global energy market. The delicate balance between these factors underscores the challenges and opportunities those who trade oil face.
As we round off this week, oil has gained almost 1 per cent, reaching a nine-month high. This surge can be attributed to various factors, including rising US diesel futures and growing concerns about tighter supplies. Pursuing profit in the volatile oil industry is high-stakes; market dynamics and geopolitical choices constantly mould the landscape.
In conclusion, Oil profit, driven by a perfect storm of supply constraints and global demand, is reaching unprecedented heights. Saudi Arabia and Russia’s decision to prolong voluntary output cuts further inflamed soaring prices, reaching levels unseen for months. However, amidst this euphoria, it’s essential to recognise the complex interplay of factors, from oil rigs and Russian oil tankers to the Russian oil price cap, that collectively shape the trajectory of oil prices.
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