Futures Movers: Oil set for 4th straight monthly rise as it resumes march toward $100 a barrel

Posted By: EN Todayon: September 29, 2023In: General Energy News, Oil & Gas News

Oil futures rose early Friday, after a pullback the previous session, with the U.S. and benchmark on track for a September gain of more than 10% as a tightening supply picture drives crude toward the $100-a-barrel threshold.

Price action

West Texas Intermediate crude
CL00,
+1.32%
for November delivery
CL.1,
+1.32%

CLX23,
+1.32%
rose 90 cents, or 1%, to $92.61 a barrel on the New York Mercantile Exchange, on track for a weekly gain of 2.9% and a monthly advance of 10.8%, based on the most actively traded contract.
November Brent crude
BRNX23,
+0.71%,
the global benchmark, was up 85 cents, or 0.9%, at $96.23 a barrel on ICE Futures Europe. The most actively traded December contract
BRN00,
+0.93%

BRNZ23,
+0.93%
gained 93 cents, or 1%, to $90.52 a barrel, set for a 2% weekly gain and an 8% monthly advance.
Back on Nymex, October gasoline
RBV23,
+0.48%
edged up 0.1% to $2.508 a gallon, while October heating oil
HOV23,
+2.36%
gained 0.4% to $3.333 a gallon.
November natural gas
NGX23,
-1.87%
fell 0.3% to $2.935 per million British thermal units.

Market drivers

Oil futures were bouncing back to end the week and month on a strong note after a round of profit-taking sent WTI and Brent lower in Thursday’s session. WTI had traded above $95 a barrel before turning south, notching its highest intraday level since August of last year, while Brent hit its highest since November.

Crude has rallied over the past four months, with tightening supplies taking center stage. Analysts have cited Saudi Arabia’s June decision to implement a production cut of 1 million barrels a day beginning in July — a reduction that was recently extended through the end of the year — as the main catalyst for the rally.

See: 4 reasons oil prices are surging toward $100 a barrel

“The supply of oil is restricted due to the production cuts in Saudi Arabia and because Russia has reduced oil exports and banned exports of certain oil products. At the same time, demand for oil is continuing to grow. This is tightening the oil market, as evidenced by declining inventories,” Carsten Fritsch, commodity analyst at Commerzbank, said in a Friday note.

Tightening supplies at Cushing, Oklahoma, the delivery hub for Nymex WTI futures, are a particular concern, falling toward 20 million barrels last week, according to Energy Information Administration data.

“Any additional decline would threaten to bring them down to a critical level, which could make further withdrawals difficult,” Fritsch wrote, while also noting that crude stocks in the Midwest rose last week, which suggests supplies in the region are less tight than the Cushing figures imply.