Oil prices surge with Brent above $85 and WTI over $81 on OPEC+ cuts and shrinking US stockpiles, fueling bullish short-term outlook.
Brent crude rose past $85 following the OPEC+ decision and heightened geopolitical risk in the Middle East. The article notes that Brent outperformed WTI due to supply disruptions in the North Sea.
Brent crossed $85 due to a combination of OPEC+ supply restraint, Middle East tensions, and North Sea maintenance that temporarily reduced regional output.
The backwardation in the Brent forward curve widened, indicating traders anticipate near-term tightness and are willing to pay a premium for prompt barrels.
WTI crude climbed above $81 after OPEC+ extended cuts and US inventories fell by 4.5 million barrels. The article flags strong refinery runs and declining Cushing storage as short-term supports.
WTI broke through the $81 resistance, a level that had capped prices since mid-July. The next target is $83.50, the April high.
The EIA reported a draw of 4.5 million barrels, compared to an expected 2 million, indicating stronger domestic demand and tighter supply.
Oil prices rallied on Aug. 4 after OPEC+ confirmed extension of production cuts through year-end. Brent crude breached $85 and WTI climbed above $81, driven by falling US crude inventories and rising geopolitical tensions in the Middle East. Analysts expect further tightness if demand picks up as projected.
Oil prices surged after OPEC+ confirmed an extension of its 2 million barrel-per-day production cut through year-end. A larger-than-expected draw in US crude inventories and escalating Middle East tensions amplified the bullish momentum.
The extension keeps supply constrained at a time when global demand is expected to rise by 1.5 million barrels per day. This widens the deficit and supports higher prices unless non-OPEC producers increase output significantly.
A sudden increase in US shale production, a resolution of geopolitical conflicts, or a sharp economic slowdown in China could quickly reverse price gains.