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WTI Crude Oil Rises, Brent Crude Follows Reluctantly

September 18, 2020 at 15:18 by Vladimir Vyun

Futures for crude oil were mixed today. West Texas Intermediate grade, used in North America, rallied, while international benchmark Brent crude was about flat, though currently, it has managed to log gains.

Market analysts speculated that the commodity got the support from the news that Saudi Arabia’s Prince Abdulaziz bin Salman criticized those members of the OPEC+ production cut deal who were not complying with the agreement. The Organization of Petroleum Exporting Countries and its allies (know as the OPEC+) met yesterday and decided to keep the production cuts at about 7.7 million barrels per day. Market analysts speculated, though, that the problem for crude was mostly demand, not supply. Russia’s Energy Minister Alexander Novak predicted that global inventories of crude will be shrinking as the world’s economy recovers from the coronavirus pandemic. Many experts were skeptical about such an optimistic prediction, though.

The negative factor for the market was the news that supply from Libya is going to resume. Khalifa Haftar, commander of the Libyan National Army in the east of the country, announced that he will lift the eight-month blockade for one month to ease Libya’s financial troubles.

Meanwhile, US oil producers are set to restart production after Hurricane Sally raged across the Gulf of Mexico, halting about a quarter of oil and natural gas production in the region. According to reports, workers returned to at least 30 offshore platforms. Yet the damage the hurricane has done to the Gulf oil output can be a reason for today’s gains of North American oil.

Futures for delivery if WTI crude oil in October rallied by $0.38 (0.93%) to $41.35 per barrel as of 15:11 GMT on NYMEX today. Brent crude for delivery in November was trading flat previously, though currently, it has managed to rise by $0.13 (0.3%) to $43.43 per barrel on ICE. At the same time, October contract for natural gas sank by $0.04 (1.76%) to $2.01 per million British thermal units.

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