Crude oil prices are rising again.
Much to the relief of oil investors.
The rise has been reflected both by West Texas Intermediate (WTI), the benchmark used for futures contracts set in New York, and Brent, the equivalent set daily in London.
As of close of trade Sept. 19 – which happened at 2:30 for oil – WTI was at $71.12 a barrel, the highest since July 10. Meanwhile, Brent closed slightly higher at $79.23.
I have previously addressed the main reasons for why the price is moving up here in Oil & Energy Investor, and for some time now, the supply side of the market balance has been tightening.
Thanks to this, there is something interesting stirring in the oil sector – something that manifested in a recommendation to my Energy Inner Circle premium subscribers just a couple days ago.
I don’t often do this, but this is a fast-track recommendation I’m including today, because you’re not going to want to miss out on this…
How Geopolitics Are Influencing Oil Benchmarks
The tightening oil supply has been accentuated by the escalating collapse in OPEC’s Venezuela, the nation with the biggest oil reserves worldwide, in addition to the intensifying civil unrest impeding oil production in two other oil cartel members – Libya and Nigeria.
The extraction declines in these three alone have more than offset earlier concerns about Russia and Saudi Arabia agreeing to increase production.
The Saudis yesterday proclaimed that they were comfortable with the current global production levels. Observers then immediately concluded what Riyadh, the capital of Saudi Arabia, had intended the pundits draw from the statement: that no increase in Saudi production would be forthcoming.
That gave further momentum to upward price movement.
Moscow has been moving more volume over the past several months, anticipating that market tightness allows more Russian oil into the market without a glut depressing price.
On the other hand, I am seeing indicators pointing toward Russia being unable to sustain production any higher beyond where they already are.
The wild card has always been the main outlier to the Russia-OPEC agreement…
The United States.
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This article originally appeared on Oil & Energy Investor by Dr. Kent Moors.
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