Falling oil supplies to the US leads to rising prices around the world – Kommersant

Oil inventories at the main US storage facility are at seasonal lows. As noted Bloombergthe depletion of reserves at the largest oil storage facility in the US, Cushing, is reverberating through markets from Asia to the Middle East and Europe, sending prices higher.

We are talking about the Cushing storage facilities in Oklahoma, the delivery point for benchmark US crude oil futures. Inventories at the hub are now slightly above seasonal lows last seen in 2014. This comes at a time when markets are facing supply restrictions from Saudi Arabia and Russia.

Flagship U.S. crude oil supplies offered in Asia are expected to rise the fastest this year, according to Bloomberg analysis. The spread between Brent crude and Middle East crude jumped to its highest level since February.

A cargo of West Texas Intermediate Midland crude due in Asia in January is being offered at a premium of $9 a barrel above UAE benchmark crude, according to traders who buy and sell the grade. That would be the highest price premium this year, according to Bloomberg. Trading will begin next week.

The price of oil from the Murban Bab field also increased relative to Dubai on the ICE Futures Abu Dhabi exchange. While spot supplies of Middle East crude will only begin trading in the coming weeks, the grade’s price premium, often compared to WTI Midland, rose today to its highest level since February.

The U.S. supply curbs have narrowed the gap between U.S. crude and international benchmark Brent to $3 a barrel. This is the lowest figure since May last year. Meanwhile, the spread between Brent crude and Dubai Middle East crude, also known as Brent-Dubai EFS, has widened sharply.

Traders also point to relatively high inventories in the Gulf Coast region as a sign that U.S. exports could remain elevated for several weeks. The end of seasonal refinery maintenance work in the US, along with the completion of refinery turnarounds in Europe, should also free up some supply.

On September 5, Saudi Arabia and Russia announced plans to extend existing oil production cuts until the end of 2023. After this decision, Brent oil went up in price up to $100 per barrel. According to calculations by the consulting company Energy Aspects, the increase in prices will more than compensate for the reduction in sales volumes for Russia and Saudi Arabia. International Energy Agency awaits a significant deficit in the global oil market in the second half of 2023 due to the OPEC+ decision to reduce production.

Read about how reduced oil production is not keeping pace with growing demand. “IEA records underfilling”.

Anastasia Larina