Oil prices rose in early Asian trade, reaching the highest settlement in 2023, due to a steep drop in U.S. crude stocks. Brent crude futures climbed to $96.71 a barrel, while U.S. West Texas Intermediate crude futures rose to $93.88. Government data showed that U.S. crude stocks fell by 2.2 million barrels, exceeding analysts’ expectations. Additionally, stocks at the Cushing, Oklahoma storage hub fell to the lowest level since July 2022, raising concerns about the quality of the remaining oil. These draws in crude stocks are a result of production cuts by Saudi Arabia and Russia, which are part of the OPEC+ alliance.
President Vladimir Putin has ordered the Russian government to stabilize retail fuel prices after a surge caused by an increase in exports. In response, the deputy prime minister suggested restricting exports of oil products purchased for domestic use, further tightening the market. The combination of tight global supplies, production cuts by OPEC+, and concerns about oil quality at storage hubs has contributed to the rise in oil prices. As a result, prices reached the highest settlement in 2023, impacting the global energy market and potentially affecting consumers’ fuel costs.
The rise in oil prices is driven by multiple factors, including a steep drop in U.S. crude stocks and concerns about the remaining oil quality at storage hubs. The production cuts by Saudi Arabia and Russia, as part of the OPEC+ alliance, have further tightened the global supply of oil. These developments have resulted in Brent crude futures reaching $96.71 a barrel and U.S. West Texas Intermediate crude futures rising to $93.88. The surge in oil prices has prompted President Vladimir Putin to take action to stabilize retail fuel prices in Russia. The proposed restrictions on oil product exports purchased for domestic use will add to the tightness in the market. Overall, these factors are contributing to a significant increase in oil prices and could have implications for the global energy market and consumers.