Oil futures: Crude surges to yearly highs on upbeat OPEC report

12 Sep 2023

Quantum Commodity Intelligence – Crude Tuesday surged to fresh 10-month highs as OPEC published an upbeat report on the health of the oil market, which was the first among a slew of data scheduled for this week, including oil reports and economic indicators.

Front-month Nov23 ICE Brent futures were trading at $92.22/b (1805 GMT), compared to the day's high of $92.40/b and Monday’s settle of $90.64/b.

At the same time Oct23 NYMEX WTI was trading $89.04/b, versus the day's high of $89.37/b Monday’s settle of $87.29/b.

OPEC maintained its 2023 demand growth at 2.4 million bpd and the outlook for 2024 growth remained at a "healthy" 2.2 million bpd, while the report also highlighted the gulf between demand and supply over the short term.

The OPEC report will be followed by the IEA, which has also largely maintained 2023 demand-growth forecasts, but trimmed its outlook for 2024 last month.

Meanwhile, this year’s North Atlantic storm season has bought little threat so far to the US Gulf, with current hurricanes Lee and Margot heading to the North Atlantic. However, Hurricane Lee could be a threat to Irving Oil refinery in Canada.

But an unusually strong Mediterranean storm has shut in over half of Libya’s crude oil export capacity, although should be short-lived.  

Storm Daniel battered the Libyan coast over the weekend, and forcing at least four oil terminals to close for several days.


Wednesday will see the release of the latest US CPI data, amid concerns over what the summer surge in oil prices will have on inflation.

“Americans are feeling the pain as gas prices are on the rise again and distillate inventories globally are low. Diesel prices are at $4.475 a gallon which is painful for manufacturers, farmers, and transportation companies but also raises concerns about the cost and availability of home heating oil,” said Phil Flynn of The Price Futures Group.

However, the Federal Reserve is expected to pause rate rises at next week’s meeting, as recent data suggests that the economy generally remains resilient.

“We look for the FOMC to keep its target range for the federal funds rate unchanged at 5.25-5.50% at its meeting on 20 September. Most market participants expect rates to remain on hold as well,” said Wells Fargo.

But the bank cautioned: “There remains some distance to go before reaching the Fed's inflation target of 2% on a sustained basis. Therefore, we expect the post-meeting statement will continue to signal that the Committee maintains a hawkish bias.”

The ECB also meets on Thursday, but the rate outlook remains uncertain against a background of faltering economic growth and energy inflation.