Crude Oil Price Update, 31 August 2023: West Texas Intermediate (WTI) crude oil (कच्चा तेल) for October delivery was last seen up US$0.89 to US$82.52 per barrel, while October Brent crude, the global benchmark, was up US$0.84 to US$86.70.
The Energy Information Administration on Wednesday reported US oil inventories fell by 10.6-million barrels last week, as demand remained high while supply is tight following production cuts by OPEC+ and one-million barrels per day of production cuts from Saudi Arabia. The Saudi cut is scheduled to expire at the end of September, but may be extended again through October.
“With Brent prices having stalled in the mid-80’s … the prospect for those Saudi barrels returning to the market anytime soon looks slim and the impact is increasingly being felt across the world as commercial stock levels of crude and fuel products continue to drop,”.
The US Bureau of Economic Analysis on Thursday said the personal consumption expenditures index, the Federal Reserve’s preferred inflation measure, rose to 3.0% in July from 3.3% in June, while the core index rose 4.2%, matching expectations, up from 4.1% in June.
The higher reading pushed the dollar higher, with the ICE dollar index last seen up 0.36 points to 103.52 as the higher core PCE reading could mean the Federal Reserve will need to hike interest rates again.
“On a 12-month basis, core goods inflation remains well above its pre-pandemic level. Sustained progress is needed, and restrictive monetary policy is called for to achieve that progress,” Federal Reserve chair Jerome Powell said in the text of an Aug.25 speech.
Weak demand from China is checking prices, as the No.1 importer reported its manufacturing sector contracted again in July. China’s manufacturing Purchasing Managers Index stood at 49.7 in July, with a reading of under 50 showing lower activity.