Crude oil prices experienced a substantial 2.23% surge, closing at 7,501, driven by compelling anticipations of a tightening global oil market. The International Energy Agency’s assessment of sustained supply reductions from major producers such as Saudi Arabia and Russia has underscored the likelihood of a substantial market deficit materializing in the fourth quarter.
OPEC’s projections have aligned with this sentiment, foreseeing a significant deficit of 3.3 million barrels per day.
In contrast, the U.S. Energy Information Administration has taken a more conservative stance, estimating a 230,000-barrel deficit. However, the U.S. crude oil inventories unveiled an unforeseen development. As they registered an increase for the first time in a month.
This surprising uptick has been attributed to heightened imports and a resurgence in production levels reminiscent of the pre-pandemic era. Crude inventories witnessed a notable rise of 4 million barrels, eclipsing expectations that had leaned toward a 1.9 million-barrel decrease. Notably, crude stocks in Cushing, Oklahoma, reached their lowest levels since December, juxtaposed against the surge in inventories on the Gulf Coast.
Further accentuating this dynamic, U.S. crude oil imports escalated to their highest rate since January 2022. These intricate fluctuations in supply and demand dynamics are painting an evolving landscape for the crude oil market.