BackOil sizzles at 10-month high on Saudi, Russia output cuts, OPEC upbeat on demand; Brent over $91/bbl
Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a September 19 expiry, were last trading higher by 1.73 per cent at ₹7,359 per bbl
PremiumOil prices rose about 1 per cent on Tuesday, September 12, boosted by a tighter supply outlook, after oil producers Saudi Arabia and Russia extended their voluntary oil supply cuts till the end of the year. The Organisation of Petroleum Exporting Countries (OPEC) said that major economies were faring better than expected despite the rising interest rates.
November Brent crude futures rose 85 cents, or 0.9 per cent, to $91.49 a barrel, while US West Texas Intermediate crude futures for October firmed by $1.02, or 1.2 per cent, to $88.31, according to news agency Reuters.
Brent breached $90 a barrel last week for the first time in 10 months after the supply cut announcement by the OPEC majors of a combined 1.3 million barrels per day (mbpd) till the end of 2023.
Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a September 19 expiry, were last trading higher by 1.73 per cent at ₹7,359 per bbl, having swung between ₹7,254 and ₹7,385 per bbl during the session so far, against a previous close of ₹7,248 per barrel.
What's driving crude oil prices?
-OPEC in its latest monthly oil market report for September, has revised down the global oil demand for 2023 by 1 lakh barrels per day to 29.2 million barrels per day (bpd) - which is 8 lakh bpd higher than 2022. The oil cartel has also cut the 2024 demand outlook by 1 lakh bpd to 30 mbpd.
-Global oil markets face a supply shortfall of more than 3 mbpd in the next quarter — potentially the biggest deficit in more than a decade — as a result of Saudi Arabia's extended output cuts. The latest data published by OPEC show why the kingdom’s supply squeeze, amid a period of record demand, has sent oil prices surging beyond $90 a barrel.
-The world oil demand will rise by 2.25 mbpd in 2024, compared with growth of 2.44 mbpd in 2023, OPEC said in its monthly report. Both forecasts were unchanged from last month. Oil futures have rallied by roughly 25 per cent since late June as fuel demand soars, while Saudi Arabia and Russia constrict supplies to boost their revenues.
Technical View
Domestic brokerage firm Religare Broking has neutral sentiments on MCX Crude Oil. ‘’MACD Bullish divergence suggest uptrend. However, to extend gains, prices need to break above the 7,320 region. A dip below 7,130 may induce weakness as well,'' said the brokerage firm in its research report. Religare sees technical levels between ₹6,800 - ₹7,680. The turnaround is seen at ₹7,130.
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