Petroleum Economist Story: Consensus Forms Behind Rising Crude Prices

[Note: This story is also published at the Petroleum Economist]

Crude oil prices rose by roughly 14% during July, and a consensus seems to have formed among analysts and observers of oil markets that prices are likely to continue rising during the remainder of 2023. The July increase appeared largely a response to the latest round of cuts by OPEC+ exporting countries, most prominently Saudi Arabia, which implemented a new cut of 1 million barrels of oil per day effective July 1.

Prices pulled back by about 2% on August 2 after the Fitch rating service downgraded U.S. debt from AAA to AA, but the ground was regained August 3 when Saudi officials announced they would extend the 1 million bopd cut through at least the end of September. Combined with an array of other market factors, Saudi Arabia’s renewed commitment appears to set up a potential for higher prices, perhaps even a return to triple digit Brent by the end of the year.

At the close of trading on July 31, the Brent price stood at $85.23 and WTI closed at $81.54.