ISLAMABAD: Oil prices remained on an upward slide on Wednesday, consolidating gains while staying at 10-month high, as investors seem more concerned about supply outlook. As of 1315 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, gained $0.14 (+0.15 percent) to reach $92.25 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went up by $0.1 (+0.11 percent) to $88.94 a barrel. Similarly, the price of Russian Sokol increased by $1.04 (+1.22 percent) to $85.96. Arab Light prices witnessed an increase of $0.86 (+0.91 percent) to reach $95.65 a barrel. TLTP
On the other hand, the price for Opec Basket surged to $94.09 with an increase of $0.97 (+1.04 percent). The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Both Brent and WTI have been trading above the 10-month highs since Tuesday last. Earlier, the prices surged after Saudi Arabia and Russia said they would extend supply cuts of a combined 1.3 million barrels per day to the end of the year. As part of their voluntary cuts, Saudi Arabia is extending its one million bpd output reduction until December, while Russia is rolling over its export cut of 300,000 bpd until the end of the year.
The International Energy Agency (IEA) said on Wednesday that oil prices are set for a surge in volatility amid an expected “significant supply shortfall” on the market in the fourth quarter of 2023, due to the Saudi-led cuts to OPEC+ oil supply. So far this year, higher crude oil production from countries outside the OPEC+ alliance has managed to offset part of the OPEC+ cuts.
“But from September onwards, the loss of OPEC+ production, led by Saudi Arabia, will drive a significant supply shortfall through the fourth quarter,” the IEA said on Wednesday in its closely-watched Oil Market Report for September.
Oil prices traded in relative calm during August, with volatility at multi-year lows, the IEA said. But a calm August was followed by the announcements of extensions of the supply cuts in early September, which sent prices and volatility higher. Volatility could further increase through the end of this year, according to the agency.
