LONDON, Sept 18 (Reuters) – As oil investors and traders focus on a rise in oil prices that has touched $100 a barrel, some crude oil grades are already trading above that mark, underscoring the expectation of tighter supply.
The price of Nigerian crude Qua Iboe exceeded $100 per barrel on Monday, according to LSEG data. Malaysian crude Tapis hit $101.30 last week, Bjarne Schieldrop, an analyst at Swedish bank SEB, said in a report.
Oil rose to a 2023 high as investors focus on the prospect of a fourth-quarter supply shortfall after Saudi Arabia and Russia extended their supply cuts. These two countries are the largest producers in the OPEC+ group, most of whose other members are also reducing production.
“The big picture is that Saudi Arabia and Russia have strong control over the oil market,” Schieldrop said.
Brent oil futures, a global benchmark, were trading as high as $94.89 on Monday and the associated benchmark used for trading much of the world’s physical cargo, called dated Brent, was just above $96 according to LSEG.
Qua Iboe and some other crudes priced to Brent are already over $100 because they are based on the price of dated Brent plus a differential or cash premium, currently valued by LSEG at around $4.25 per barrel.
Schieldrop said dated Brent is very likely to rise above $100 because “only noise is needed to take it above.” Swiss bank UBS predicts Brent futures will reach triple digits.
“We expect Brent to trade in a range of $90 to $100 over the coming months, with an end-year target of $95,” said Giovanni Staunovo, an analyst at UBS.
Reporting by Alex Lawler, editing by David Evans
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