Tuesday marked the fourth straight session of rising oil prices as concerns about a supply shortage brought on by Saudi Arabia’s and Russia’s prolonged production cuts increased in response to the U.S.’s lackluster shale output. While Brent crude prices, the international oil benchmark, increased by 58 cents, or 0.61%, to $95.01 per barrel, U.S. West Texas Intermediate crude futures increased by 99 cents, or 1.1%, to $92.47.
Prices have increased for three weeks running, and both benchmarks are currently near 10-month highs. The U.S. Energy Information Administration (EIA) announced on Monday that U.S. oil production from the main shale-producing regions is on track to decline to 9.393 million barrels per day (bpd) in October, the lowest level since May 2023.
After three consecutive months, it will have dropped. These projections follow the extension last month by Saudi Arabia and Russia of their combined production restrictions of 1.3 million barrels per day (bpd) through the end of the year.
The Energy Minister of Saudi Arabia justified OPEC+’s cuts to the oil market supply on Monday, arguing that mild control of global energy markets is necessary to reduce volatility. However, he also cautioned against the uncertainties surrounding Chinese demand, European growth, and central bank intervention to combat inflation.
