Brent Oil Price Exceeded $86 Per Barrel for the First Time in Two Weeks

BySamson Ononeme

Aug 30, 2023
Brent Oil Price Exceeded $86 Per Barrel for the First Time in Two Weeks

Key Insights

  • Brent oil price today exceeded $86 per barrel for the first time since mid-August.
  • The price of WTI approached $82 per barrel.
  • Prices are rising amid a sharp decline in US oil reserves and the growing threat from Hurricane Idalia in the Gulf of Mexico, where 15% of all US oil production is concentrated

The price of benchmark Brent oil on Wednesday, August 30, exceeded $86 per barrel. At the day’s high, Brent futures for October delivery were priced at $86.17 per barrel, up 0.8% by yesterday’s close.

At 16:36 GMT, Brent oil was trading at $85.81, which is 0.37% higher than the closing price of the previous session.

The cost of October contracts for WTI crude on Wednesday approached the mark of $82 per barrel. At the maximum they cost $81.88, adding 0.9% to the previous closing price. At 16:36 GMT, WTI oil was trading at $81.59, up 0.53%.

Oil prices are rising against the backdrop of a sharp decline in US inventories and the growing threat of Hurricane Idalia in the Gulf of Mexico, which is “gradually approaching the coast of Florida,” said MarketsXplora analyst Stephen Ethan.

The Gulf of Mexico accounts for about 15% and 5% of all American oil and gas production, respectively, Interfax writes, citing data from the US Department of Energy.

The storm could disrupt fuel supply infrastructure and also negatively impact fuel consumption ahead of the Labor Day weekend. On the other hand, mining enterprises in the Gulf of Mexico are also under threat, although current forecasts suggest that the bulk of production will not be affected and will operate uninterruptedly, Ethan noted.

According to the American Petroleum Institute, US oil inventories fell by 11.5 million barrels last week. Data from the US Department of Energy will be published at 17:30 GMT on Wednesday.

Read also: Russia will reduce oil exports by 300,000 barrels per day in September

Analysts surveyed by S&P predict that the data will indicate a reduction in oil inventories by 5.2 million barrels, gasoline by 600,000 barrels, and distillates by 1.4 million barrels.

Samson Ononeme

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