(News Bulletin 247) – The November contract on WTI listed in New York exceeded $95 per barrel during the night from Wednesday to Thursday, a first since July 2022. The fall in crude stocks on Wednesday added tension to a market already tight due to production cuts in Saudi Arabia and Russia.

Oil is still regaining strength. And the reference for the American market in particular. The November contract on WTI listed in New York thus briefly exceeded $95 (a first since July 2022) per barrel during the night from Wednesday to Thursday and gained another 0.8% this Thursday morning around 8:30 a.m. at 94 .41 dollars per barrel. The day before it had already gained more than 3.6%.

The prices of the American oil benchmark were driven by the figures on oil reserves in the United States last week. Crude oil stocks fell by 2.2 million barrels, significantly above the 900,000 units anticipated by economists. This decline “indicates a reduction in commercial and strategic crude stocks,” notes Stephen Innes of Spi Asset Management.

Above all, this decline puts pressure on the Cushing site in Oklahoma, the storage and delivery location for oil futures contracts negotiated in New York.

“In particular, the inventory level at Cushing was below 22 million barrels (bbl), below what is estimated to be the upper limit of the Oklahoma tank farm’s minimum operating level. This publication played an important role in the rise in oil futures prices,” notes Stephen Innes. According to Bloomberg, this level of stocks in Cushing has fallen to its lowest since July 2022.

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“Over the past seven weeks, Cushing stocks have been reduced by 12.681 million barrels, a decrease of 36.6% since the beginning of August,” continues Stephen Innes.

“What I fear for this market is that we have destocked so much,” Amrita Sen, co-founder and head of research at the consulting firm Energy Aspects, told Bloomberg TV. “Right now what’s happening in the United States – Cushing is dry,” she added.

This melting of crude oil reserves in the United States comes as the market is already tight due to production cuts by Saudi Arabia and Russia, with both countries having extended these reductions until the end of the year 2023.

These extensions will lead to a deficit on the supply side for the fourth quarter, a shortage about which the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC) have recently warned. The bank UBS had previously estimated this deficit at more than 1.5 million barrels per day for the fourth quarter. But OPEC estimates it at 3 million barrels per day.

“We believe that strong fundamentals will support Brent around current levels, in a range of 90-100 dollars, per barrel over the coming months,” estimates UBS. Another global oil price benchmark, North Sea Brent is currently trading a little above WTI in price terms at $94.92 per barrel.