TOKYO, Sept 20 (Reuters) – Oil prices rose in early trading on Wednesday, hovering near 10-month highs hit the day before, as a larger-than-expected decline in U.S. oil inventories and a Low U.S. shale production reinforced fears about crude oil. supply for the remainder of 2023.
Global benchmark Brent crude futures rose 6 cents, or 0.1 percent, to $94.40 a barrel by 0034 GMT, remaining close to the highest since November of $95.96 hit on Tuesday.
U.S. West Texas Intermediate crude futures rose 29 cents, or 0.3%, to $91.49 a barrel, not far from the 10-month high of $93.74 a barrel reached the day before. The October WTI contract expires on Wednesday and the more active November contract rose 9 cents, or 0.1%, to $90.57 a barrel.
Industry data released Tuesday showed U.S. crude oil inventories fell last week by about 5.25 million barrels, according to market sources citing figures from the American Petroleum Institute. Analysts polled by Reuters had expected a drop of 2.2 million barrels.
“A significant decline in U.S. oil inventories and slow U.S. shale production have added to supply concerns due to prolonged production restrictions by Saudi Arabia and Russia,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
“There will be some short-term adjustments in oil prices due to the recent surge, but expectations of reaching $100 per barrel for Brent and WTI later this year will remain unchanged,” he said .
The Russian government plans to impose export duties on all types of petroleum products amounting to $250 per tonne – much higher than current fees – from October 1 to June 2024, to combat shortages of fuel, sources told Reuters. Tuesday.
The move comes as U.S. oil production from major shale-producing regions is on track to fall to 9.393 million bpd in October, the lowest since May 2023, and after Saudi Arabia and Russia extended their combined supply cuts of 1.3 million bpd through the end of the year. year.
Meanwhile, Exxon Mobil Corp (XOM.N) has committed to producing more oil by nearly 40,000 barrels per day in Nigeria as part of a new investment drive in the country, a presidential spokesperson, citing Exxon’s president of global upstream operations.
A recent rise in WTI that pushed Brent higher has closed arbitrage routes for U.S. crude to Europe and Asia and is preventing Atlantic Basin oil from flowing east, traders said.
Investors are awaiting a series of interest rate decisions from central banks this week, including that of the US Federal Reserve on Wednesday, to assess the outlook for economic growth and fuel demand.
Reporting by Yuka Obayashi; Editing by Sonali Paul
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