Crude futures climb for ninth straight week
By Daniel Tyson
19:01, 22 October 2021
Crude is about to reach its longest streak of weekly price advances in six years as US supplies shrink and OPEC+ increases supply slightly.
On Friday afternoon, December 2021 future deliveries of West Texas Intermediate continued to climb to $83.62 a barrel, up 1.4%, while Brent crude was up 0.97% to $85.44 on the NYMEX.
Crude futures continued their winning streak for the ninth straight week.
At the beginning of the week, oil prices slumped a bit but rallied on Wednesday and Thursday upon the release of the US Energy Information Administration’s weekly report showing weekly declines with crude supply hitting its lowest level since 2018.
Analysts forecast tightening over the near-term as OPEC+ will most likely continue to release only an extra 400,000 barrels a day until the end of the year.
US President Joe Biden said Thursday American motorists should expect higher gas prices until next year due to OPEC+’s refusal to release more oil.
“I don’t see anything that’s going to happen in the meantime that’s going to significantly reduce gas prices,” Biden said during a CNN town hall meeting.
The president followed that by saying he might release oil from the strategic reserve, which could lower prices by about 18 cents a gallon, but in most areas of the US a gallon of gas would still be north of $3.
On Friday afternoon, Reformulated Blendstock for Oxygenate Blending (RBOB) was down 0.08% to $2.47 a gallon.
Meanwhile, US stockpiles are at record lows. The last time levels were so low, crude prices were pushing $100 a barrel.
The president could be wrong, of course. Oil futures could stall soon. On Thursday, US weather bureau National Oceanic and Atmospheric Administration predicted a warmer than normal winter for the US, with a drier and warmer winter expected across the South and Southeast.
“This would somewhat alleviate the situation on the energy markets because less heating oil and gas would then be needed for heating purposes,” according to a client note from Commerzbank.
The oil field service giant Schlumberger on Friday reported $5.85bn in revenue during the third quarter, up 4% sequentially and 11% from the third quarter of last year.
Schlumberger CEO Olivier Le Peuch summed up oil’s historic pricing rise this way: “The industry macro fundamentals have visibly strengthened this year, particularly in recent weeks – with demand recovery, oil and gas commodity prices at recent highs, low inventory levels and encouraging trends in pandemic containment efforts. Absent a recession or pandemic-related setback, these favourable conditions are expected to materially drive investment over the next few years – particularly internationally –and result in exceptional multi-year capital spending growth globally, both on land and offshore.”
Read more: Crude futures make Wednesday morning comeback
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