Oil prices fell 1 percent on Friday on macroeconomic concerns and profit-taking, but rose close to a 30 percent gain in the third quarter as OPEC+ production cuts tightened global crude supply.
Front-month Brent November futures fell 7 cents to $95.31 a barrel by contract expiration; It increased by approximately 2.2% in the week and 27% in the third quarter. The more liquid Brent December contract fell 90 cents to close at $92.20 a barrel.
West Texas Intermediate (WTI) crude rose 1% for the week and 29% for the quarter before falling to $90.97 at the close.
With oil futures approaching $100 per barrel, many investors have profited from the rise due to ongoing macroeconomic concerns. When considering profitability and economic concerns, WTI was always eye-catching but has begun to lose its luster.
Oil and gas activity in three US energy-producing states is on the rise with the latest rise in prices, according to data.
US crude production in July rose to its highest level since November 2019, according to Energy Information Administration (EIA) data.
White House economic adviser Lael Brainard said investors were expecting a potential partial shutdown of the US government on Sunday, which he said was an “unnecessary risk” to the resilient US economy.
Concerns about the Chinese economy have also intensified following a report that shares in debt-ridden Evergrande Group were placed on probation and suspended until further notice.
The number of U.S. oil and gas rigs, an early indicator of future production, decreased by seven to 623 in the week ended Sept. 29, reaching the lowest level since February 2022, according to Baker Hughes.
While the total number of drilling rigs decreased by 51 units in the third quarter, outages appear to have slowed compared to the decrease of 81 units in the second quarter due to tighter supply and recovery in oil prices.
Brent is expected to average $89.85 per barrel in the fourth quarter and $86.45 in 2024, according to a survey.
Supply cuts announced by Saudi Arabia and Russia are expected to dominate oil prices for the rest of this year. The OPEC+ ministerial panel meeting will be held on October 4 and the possibility of Aramco’s voluntary supply cuts being reduced has increased.
However, it can be said that the rise toward $100 per barrel may be short-lived due to the artificial nature of the supply shortage in the system and the fragile macroeconomic environment.