Oil just hit its highest level of the year — and some analysts expect a return to $100 before 2024
In an aerial view, oil storage tanks are shown at the Enterprise Sealy Station on August 28, 2023 in Sealy, Texas.
Brandon Bell | Getty Images News | Getty Images
Oil prices climbed to their highest level of the year this week, extending a rally that has put a return to $100 a barrel sharply into focus.
Indeed, some analysts believe crude prices could hit this milestone before year-end.
International benchmark Brent crude futures traded at $93.90 a barrel on Friday morning in London, around 0.2% higher. U.S. West Texas Intermediate futures, meanwhile, stood at $90.41, almost 0.3% higher for the session.
Both Brent and WTI settled at their highest respective levels of the year on Thursday. The oil contracts are sharply higher month-to-date and remain firmly on track to notch their third consecutive positive week.
The price rally comes amid growing expectations of tighter supply after Saudi Arabia and Russia moved to draw down global inventories and extend their oil output cuts through to the end of the year.
OPEC kingpin Saudi Arabia said on Sept. 5 that it would extend its 1 million barrel per day production cut through to year-end, with non-OPEC leader Russia pledging to reduce oil exports by 300,000 barrels per day until the end of the year. Both countries have said they will review their voluntary cuts on a monthly basis.
Analysts at Bank of America have indicated they now believe oil prices could soon spike beyond triple digits.
“Should OPEC+ maintain the ongoing supply cuts through year-end against Asia’s positive demand backdrop, we now believe Brent prices could spike past $100/bbl before 2024,” analysts led by Francisco Blanch said Tuesday in a research note.
Tamas Varga of oil broker PVM said a jump toward the $100 milestone was “plausible,” citing production constraints from Saudi Arabia and Russia, upcoming refinery maintenance, the structural shortage of diesel in Europe and a growing consensus that the current cycle of tightening will soon come to an end.
“Nonetheless, such a rally also entails renewed inflationary pressure,” Varga told CNBC on Friday. This was reflected, he said, in this week’s U.S. inflation data and the rise in consumer spending, which indicated that interest rates may stay higher for longer and could have a negative impact on both economic and oil demand growth.
“For this reason, I believe that any spike towards $100 will be short-lived,” he added.
‘A significant supply shortfall’
The International Energy Agency warned on Wednesday that Saudi Arabia and Russia’s production constraints would likely result in a “substantial market deficit” through the fourth quarter.
The world’s leading energy authority said in its monthly oil report that output curbs by OPEC and non-OPEC members of over 2.5 million barrels per day since the start of the year had so far been offset by members outside the OPEC+ alliance — such as the U.S. and Brazil.
“From September onwards, the loss of OPEC+ production, led by Saudi Arabia, will drive a significant supply shortfall through the fourth quarter,” the IEA said.
Christyan Malek, global head of energy strategy and head of EMEA oil and gas equity research at JPMorgan, said he believes the price of oil is likely to trade in a range of $80 to $100 in the short term — and at around $80 over the long term.
“As we go into next year, it will be very dependent on how we see China evolve … what does the US do? And how does shale respond?” Malek said Monday, noting the U.S. appears to have limited options if it is to try to drive oil and gasoline prices lower ahead of next year’s pivotal presidential election.
“I think for us one of the important data points for this year as a whole is that we tested $70. You have to test the marginal costs, we can all predict it, and we got there. We got to $70, and it bounced off so with that marginal cost, we’re looking at a much higher long-term price,” he added.
A lone pumpjack located in the middle of a large solar array outside of Bakersfield, Kern County, California.
Citizens Of The Planet | Universal Images Group | Getty Images
Not everyone believes oil prices are destined for an imminent return to $100, however. Ole Hansen, head of commodity strategy at Saxo Bank, says the crude sector looks increasingly overbought in the near-term and appears in need of a pullback.
“We do not join the $100 per barrel camp but will not rule out a relatively short period where Brent could trade above $90,” Hansen said in a research note published Sept. 8.
“From a technical perspective, Brent has been in a bullish uptrend since July and needs to hold support at $89 as a break may trigger long liquidation towards $87.5 from traders who bought the production cut extension news,” he added.
“However, the medium-term uptrend is still firm with trendline support near $85, potentially being the bottom of a new higher range supported by OPEC’s active management of supply.”
— CNBC’s Michael Bloom contributed to this report.
Climate XChange’s 9th Annual EV Raffle is your chance to win the electric car of your dreams – from Rivian to Tesla to Porsche and more!
But don’t wait, because there are only 5,000 tickets available!
Imagine getting to custom order your perfect EV, with every detail just the way you want it, up to $120,000, and with all taxes covered. That’s what the Grand Prize Winner gets to do – and you could be that winner.
How it works
Enter at CarbonRaffle.org/Electrek. Every ticket you buy is one entry to win. Climate XChange is only selling 5,000 tickets, which means your odds are better here than most internet sweepstakes! Plus, you can feel good knowing your ticket supports an amazing cause: pushing for state-level climate action and advancing the transition to a zero-emissions economy.
The prizes
- Grand Prize: Custom-built EV of your choice, valued up to $120,000, with all taxes covered.
- 2nd Place: $12,500 cash.
- 3rd Place: $7,500 cash.
- Early Bird Prize: Buy your ticket before December 31, 2024, and you’ll also be entered to win $10,000 on January 3, 2025.
That’s two drawings for the price of one ticket – and four chances to win big!
Why enter?
Climate XChange has been making dreams come true for nearly a decade. Last year’s winner drove off in a custom red Tesla Model X Plaid, and you could be next! Climate XChange takes fairness seriously: It prints every raffle ticket stub and live-streams the entire drawing process, ensuring transparency. Independent auditors oversee everything, so you know the drawing is legit.
Who is Climate XChange?
Climate XChange (CXC) is a nonpartisan nonprofit working to help states transition to a zero-emissions economy. It advances state climate policy through its State Climate Policy Network, connecting over 15,000 advocates and policymakers, and through its State Climate Policy Dashboard, a leading data platform for tracking climate action across the US.
Get your ticket today
Visit CarbonRaffle.org/Electrek to grab your ticket. Limited tickets are available – remember, Climate XChange is only selling 5,000 tickets – so don’t miss your shot at an electric future!
Climate XChange EV Raffle rules summary
- Must be 18 or older to enter.
- Tickets are available at CarbonRaffle.org/Electrek.
- Only 5,000 tickets will be sold.
- Early Bird Drawing on January 3, 2025.
- Grand Prize Drawing on February 28, 2025.
All proceeds support Climate XChange’s work to push for ambitious climate policy – so even if you don’t win, you’re still making a difference.
FTC: We use income earning auto affiliate links. More.
China just connected its largest single-capacity solar farm built on a former coal mining area, which is in the Gobi Desert, to the grid.
The Mengxi Blue Ocean Photovoltaic Power Station, located in Otog Front Banner, Ordos, Inner Mongolia, came online on November 5. With a massive installed capacity of 3 gigawatts (GW) and over 5.9 million solar panels, the plant will generate around 5.7 billion kilowatt-hours of electricity annually – enough to power 2 million households.
This huge project will save about 1.71 million tons of standard coal each year and cut carbon dioxide emissions by roughly 4.7 million tons, which is equivalent to planting 62,700 hectares (around 155,000 acres) of trees.
Built on coal mining subsidence land, Mengxi Blue Ocean is part of China’s national West-East Electricity Transfer Project, which brings investment and development to western China west while supplying the growing need for electricity in the eastern provinces.
The solar farm includes the country’s first large-scale outdoor solar testing base in the Gobi Desert climate, demonstrating the potential for large solar installations in challenging environments.
The power station makes use of new rare earth alloy grounding materials, cutting costs by 40%. It also replaces traditional concrete foundations with steel to minimize impact on the local grassland ecosystem.
Chuang Xihong, deputy director of the Engineering Construction Department of Guodian Power Group, CHN Energy’s parent company, explained that Mengxi Blue Ocean is an agrivoltaic project as well [via PV Tech]:
Fine forage and sand-fixing plants are planted under the PV modules, providing grazing for Australian White Sheep and chickens. A composite ecological development model will be established where PV power generation and breeding will go hand in hand.
Read more: China powers up the world’s largest open-sea offshore solar farm
If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*
FTC: We use income earning auto affiliate links. More.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports7 months agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Environment1 year agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway