2023-10-07 22:02:50
oil
Crude oil prices ended their quarterly trading at a record high for the first time in 2023, as prices achieved a strong rise of approximately 25% in the third quarter of this year, amid fears of a shortage of oil supply in the markets, especially following the Kingdom of Saudi Arabia and Russia issued – Major oil producers globally, some important decisions related to reducing crude oil production.
Oil prices at the end of the third quarter of 2023
Crude oil contracts achieved a strong rise during the third quarter, as spot Brent crude contracts concluded the quarter with a record high that pushed them to reach the level of $93 per barrel, compared to $78 per barrel at the beginning of the third quarter. At the same time, spot contracts for West Texas Intermediate crude ended their quarterly trading at A record high and reached the level of $90 per barrel, i.e. an increase of more than 22%, following opening the quarter at only $73 per barrel, i.e. an increase of more than 20%.
Why did oil prices achieve strong profits in the third quarter of 2023?
Crude oil prices opened the third quarter trading on a sudden rise, due to the state of fear that swept the markets regarding the possibility of a shortage in crude oil supplies, and even following the Kingdom of Saudi Arabia and Russia surprised the world with a new decision related to reducing crude oil production, especially since Russia and Saudi Arabia are considered major oil producers. Globally, this in turn pushed oil prices to rise significantly.
From this standpoint, Saudi Arabia and Russia decided in early last June to extend the voluntary reductions in oil production by 1.3 million barrels per day until the end of the year, which prompted Brent and Texas crude prices to record their first profits in the third quarter and reach the level of 78 and 73 dollars per barrel, following which oil prices continued to decline. The rise until the middle of the third quarter reached the level of $85, thanks to decisions to extend production cuts by Saudi Arabia and Russia.
However; Oil prices faced some downward pressures in the middle of last August, which caused prices to fall to the level of $83 per barrel, as a result of fears that swept the markets regarding the possibility of weak global demand for crude oil, especially following the International Energy Agency reduced, in its monthly report, its expectations for growth. Global demand for crude oil will increase by one million barrels per day in 2024, citing the difficulties faced by the economy of the second largest importer of crude oil in the world – China, in achieving stable economic growth following the Corona pandemic.
In addition to this; Oil prices rose once more at the beginning of September, amid markets concern regarding the scarcity of oil supply, following Tropical Storm Idalia struck western Cuba, which affected oil production from the coast of the Gulf of Mexico. It was like a hurricane, as it headed towards Florida in the United States. United States, which represents regarding one-sixth of the United States’ crude oil production and produces regarding 2 million barrels per day, and this has reinforced the rise in oil prices.
And besides; Oil prices continued to rise strongly, achieving an increase of more than 5.00% during the month of September, supported by statements from the People’s Bank of China regarding the intensive measures that the bank will take to enhance confidence in China’s economy, in addition to statements by one of its members that the country can achieve economic growth exceeding 5%. In 2023, which strengthened optimism regarding the possibility of a recovery in Chinese demand for oil in the future, which contributed to the rise in oil prices and their continued upward momentum.
at the end; Crude oil prices concluded their trading at a record high in the third quarter of this year and stabilized at $92 per barrel, compared to $73 in their first trading in the third quarter, i.e. an increase of more than 25%.
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