Commodities Analysis by Investing.com (Calogero Selvaggio) covering: Chevron Corp, Exxon Mobil Corp, Crude Oil WTI Futures, ProShares UltraShort Bloomberg Crude Oil. Read Investing.com (Calogero Selvaggio)'s latest article on Investing.com
) might just be getting started, as they've yet to make their significant move. Looking at the chart, they've recently crossed the psychological barrier set by the highs of 2008, with the highs from 2011 acting as a support level.
When we look at U.S. stocks of oil and other petroleum products, which are a highly visible part of the global market due to their weekly reporting, they've been on a decline, dropping by 34 million barrels since mid-July.inventories is seen as a sign that the global market itself is experiencing a deficit. Consequently, spot prices have been on the rise, along with the spread. As of August 25, commercial crude oil inventories were just slightly above 1 million barrels, which is down by approximately 1 million barrels compared to June 30. This has led to an increase in U.S. crude oil futures prices, particularly for monthly maturities. The spread between 3-month crude oil futures has also entered a state known as 'backwardation,' meaning that the futures contract price is lower than the current spot price of the asset. This spread is currently at $1.14 per barrel compared to the situation in June.Furthermore, in the first half of 2023, the US released approximately 26 million barrels of crude oil from the Strategic Petroleum Reserve. Since the beginning of 2022, around 247 million barrels have been released from this reserve. Initially, this release contributed to pushing spot prices and spreads down. However, as the US moved to counter oil shortages caused by the Russian invasion of Ukraine, they began accumulating oil once again. This reduction in the availability of crude oil in the global market subsequently drove prices higher. This trend coincided with additional production cuts by Saudi Arabia and Russia, which amounted to approximately 75 million barrels between July and August. According to Bloomberg, Saudi Arabia's total exports in August reached about 5.6 million barrels per day, marking the lowest level observed since March 2021.At the same time, Saudi Arabia is discreetly working to reduce global supply in an effort to push oil prices back up, potentially into triple digits. Their strategy for September involves imposing significant price hikes on Europe and increasing the cost of supplies to Asia. Additionally, the agreement between Russia and the other OPEC+ members should not be underestimated, as it aims to cut oil exports by 500,000 barrels per day.
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