The rise in the oil market continues. At the moment it appears that prices will increase further. Because several renowned institutions, including the International Energy Agency, have noted that the market is becoming a lot tighter. Although OPEC+ and the American Energy Agency (EIA) do not seem to agree on the extent of the shortage.
On Thursday, September 7, Brent crude was trading at $89,92 per barrel. Since then, the oil price has risen steadily. At the time of writing (Thursday, September 14), oil was trading at €92,29.
The oil price is currently at its highest level in ten months. The higher prices follow reports from various government institutions. According to oil cartel OPEC+, we are at the beginning of a very sluggish market. The cartel estimates that a global shortage of 2023 million barrels per day will arise in the fourth quarter of 3,3. The oil price is expected to rise further, especially given that oil reserves have been significantly depleted in the third quarter.
The International Energy Agency also confirms that supply is declining rapidly. The agency (IEA) attributes a shortfall of around 2,5 million per day to the cartel's production declines. According to the agency, on the other hand, several other oil producers such as the United States, Brazil and Iran have increased their oil production. Still, the agency's assessment does not appear to be that far from OPEC's view. Due to higher global demand, the impact of the fourth quarter is strong with growth of 2,2 million barrels per day.
USA
The authorities in the United States have a different view. The US Energy Agency (EIA) estimates lower demand growth and also envisages greater growth in oil production outside the OPEC+ countries. Based on these differing figures, the United States Energy Commission concludes that the deficit is around 230.000 barrels per day. The organization's figures on oil supplies do not immediately appear to indicate a tighter market. The organization estimates that US oil inventories increased by 4 million barrels, while the market expected a decline of 1,9 million barrels.
It should not be surprising that the estimates of the American Energy Agency and OPEC+ are so far apart. The interests of the organizations differ considerably. For example, while Saudi Arabia needs an oil price of around $100 to pay for their government expenses, Biden has an interest in a low gasoline price. The US gasoline price is starting to approach $4 per gallon and that could pose a significant risk to Biden's position in the late 2024 elections.
Meanwhile, the price of diesel is also on the rise. On Thursday, September 7, diesel traded for €142,04 per 100 liters. After that, the diesel price rose by more than €5. On Tuesday, September 12, the price of diesel was at its highest point of the week, at €147,73. On Wednesday, September 13, the price fell slightly to €146,51.