Crude oil price hits $97 per barrel after US storage hub records decline in stocks

Brent crude oil price rallied to $97.5 on Thursday, as the crude storage hub in Cushing, Oklahoma, United States, fell by 943,000 barrels to 22 million barrels within one week.

According to the Managing Director of TD Securities, Bart Melek, the hike in Brent oil price was driven by the decline in crude stocks in Cushing.Read more

“Today’s price action seems to be Cushing driven, as it reaches a 22 million bbl low, the lowest level since July 2022,” Melek told CNBC.

The price of crude oil started the week at $93 per barrel but skyrocketed by 4.83 per cent in the last four days. Although the price has dropped slightly to $96.18 as of the time of filing this report.

Brent crude oil projection

According to Malek, the price of crude oil will remain high till the end of the year, as it receives support from Saudi Arabia and Russia cuts.

READ ALSO:Nigeria to renegotiate crude oil quota, after OPEC cuts country’s output by 440,000

Saudi Arabia had extended its one million production output cut to December 2023, while Russia settled to drop its production by 300,000 barrels to drive up prices.

Aside from the voluntary cuts by the two countries influencing crude oil costs, a further drop in supply is expected due to the season of refinery maintenance, which Malek said is close by.

Refinery maintenance is a turnaround period that occurs between March to May and September to November. It usually leads to a production break.

“We do think that prices could keep up near these levels for quite some time. But I don’t think it’s too permanent. And we might have seen the end of this rally,” he said.

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