With oil investors and traders eyeing a rise in oil prices approaching $100 a barrel, some grades of crude are already trading above that milestone, underscoring expectations of tight supplies.
The direct price of Nigeria’s Qua Iboe crude oil topped $100 a barrel on Monday, according to LSEG data. Malaysian crude oil Tapis reached $101.30 last week, Swedish SEB Bank analyst Bjarne Schieldrop said in a report.
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Oil prices have risen to their highest levels in 2023, with investors eyeing the prospect of supply shortages in the fourth quarter after Saudi Arabia and Russia extended production cuts. The two countries are the largest producers in the OPEC+ group, with most other members of the group also limiting output.
“The overall picture is that Saudi Arabia and Russia have a firm grip on the oil market,” Schilddrop said.
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However, the export duty on diesel has been reduced to Rs 5.50 per liter and that on ATF has been reduced to Rs 3.50 per liter.
Brent crude futures, the global benchmark, traded as high as $94.89 on Monday, while the related benchmark used to trade most physical cargoes around the world, known as Brent, was trading at just above $96, according to the London Stock Exchange.
Qua Iboe crude and some other crudes are already priced above $100 relative to Brent because they are based on the Dated Brent price plus a cash spread or premium (LSEG currently assesses this at around $4.25 a barrel).
Schieldrop said there is a strong chance that Dated Brent crude oil will break through $100 as “it only takes noise to push it above $100.” Swiss bank UBS expects Brent crude futures prices to hit triple digits.
“We expect Brent crude prices to trade between $90 and $100 over the next few months, with a year-end target of $95,” UBS analyst Giovanni Staunovo said.