Brent Crude Tops $87 a Barrel for the First Time in Four Months

BySamson Ononeme

Aug 9, 2023
Brent Crude Tops $87 a Barrel for the First Time in Four Months

Key Insights

  • The price of Brent oil exceeded $87 per barrel for the first time in almost four months. WTI oil approached $84 per barrel. 
  • High oil prices are being supported “by creating shortages in the world,” including Saudi Arabia’s decision to extend production cuts into September, experts say. 

The price of Brent crude oil exceeded $87 per barrel for the first time since April 12. October futures for Brent on the ICE exchange on Wednesday, August 9, traded at a maximum of $ 87.09, rising by 1.07%.

At 15:03 GMT, Brent contracts for September delivery were worth $86.98, up 0.94% from the closing price of the previous session.

WTI oil approached $84 per barrel on Wednesday. Contracts for WTI with delivery in September rose in price by 1.2% and at a maximum price of $83.9 per barrel. At 15:03 GMT, WTI futures were worth $83.8, up 1% from the last close.

Related: Brent Oil Prices Unlikely to Fall Below $70, Citigroup Predicts

Factors contributing to high oil prices

High oil prices on the market are supported “by creating its shortage in the world”, thanks to which Brent quotes remain near three-month price highs, MarketsXplora analyst Stephen Ethan said.

Even a local decline in oil purchases by China did not lead to a downward reversal in crude oil prices. Saudi Arabia’s decision to extend the unilateral production cuts and the soft landing of the US economy improved the mood of oil traders, the analyst states.

The fact that Saudi Arabia decided to extend the voluntary cut in oil production by 1 million barrels per day in September, it became known last week. Thus, next month the kingdom will produce about nine million barrels of oil per day, the lowest level in several years.

Russia will cut oil exports by 300,000 bpd in September, Deputy Prime Minister Alexander Novak said August 3.

Samson Ononeme

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