Oil inches toward $100 per barrel, surpasses $90 to hit year high

by JACKSON WALKER | The National Desk

Mon, September 18th 2023, 9:16 PM UTC

378796 09: A pipeline carries oil September 20, 2000 at the Federal Strategic Petroleum Reserve facility known as Big Hill near Beaumont, Texas. It is one of four crude oil storage sites run by the U.S. government that could be tapped to ease the oil crisis. The Big Hill facility has 14 underground solution-mined storage caverns that have a combined storage capacity of 160 million barrels. The site has demonstrated the capability to deliver crude at 930,000 barrels per day. The Big Hill site is connected via a 25-mile, 36-inch pipeline to the Sun Marine Terminal and the Unocal Marine Terminal at Nederland, Texas. The pipeline also interconnects with the Texaco 20-inch pipeline system in Port Arthur, Texas. The reserve, created in 1975 after the Arab oil embargo, is intended to provide a stopgap in case of disruptions in oil imports. It has been used only once, during the Gulf War in 1991. (Photo by Joe Raedle/Newsmakers)

WASHINGTON (TND) — Brent oil futures, a global oil trading benchmark, has reached nearly $95 per barrel, according to data published Monday.

The figure, which hit $94.98 Monday, marks a new high for 2023. It previously fell as low as $72 in June.

The rise is being attributed to voluntary production cuts by Saudi Arabia and Russia, the two largest OPEC+ producers. The cuts have led to decreased supply of and increased demand for the resource.

U.S. gasoline prices also jumped by 10% to $3.90 per gallon, The Guardian reported. Jet fuel prices rose in the U.S., China and Europe, along with the demand for flights.

In some markets, the price of oil has already hit $100. Nigerian crude Qua Iboe already exceeded $100 per barrel Monday, while Malaysian crude Tapis hit $101.30 last week, Reuters reported.

The sharp price increase may soon be counteracted, however, by the introduction of oil supplies from other non-OPEC+ countries. Countries such as Canada, Brazil, Argentina, Guyana and Norway each stand to produce 1.8 million barrels of oil per day, Yahoo Finance reports.

"We expect Brent to trade in a range of $90–100 over the coming months, with a year-end target of $95," UBS analyst Giovanni Staunovo told Reuters.

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