Energy Information Administration will be closely watched next week, said Barbara Lambrecht, commodity analyst at Commerzbank, in a Friday note. Monthly reports from the International Energy Agency, the Organization of the Petroleum Exporting Countries and the U.S. Russia, meanwhile, lowered production by 20,000 b/d to 9.4 million b/d in August, it said, noting that Russia, in July, had pledged a 500,000 b/d supply cut, but specified that it pertains to exports, not production. Saudi Arabia's oil production was at 8.95 million b/d in August, down 100,000 b/d month-on-month and at its lowest since May 2021, according to the survey. Output increases in Iran, Iraq and Nigeria more than offset further reductions by Saudi Arabia and Russia, it showed. However, crude-oil production by OPEC+, which is made up of members of the Organization of the Petroleum Exporting Countries and its allies, grew by 120,000 barrels per day in August to average 40.52 million barrels per day, according to a Platts survey by S&P Global Commodity Insights released Friday. Gains this week came after Saudi Arabia announced it would extend a production cut of 1 million barrels a day, which took effect in July, through the end of the year, while Russia said it would also extend supply cuts. They believe the path of least resistance is "higher for oil based on tight physical market fundamentals and the technical breakout to fresh 2023 highs." "The focus is no longer the simmering risks to demand associated with recession." The oil market's focus has "shifted to the tight supply situation given the extensions to output curbs announced by Saudi Arabia and Russia over the course of the last week," analysts at Sevens Report Research wrote on Friday's newsletter. Both grades ended Wednesday at their highest since 2023 and Brent settled Friday at a fresh 2023 high. WTI on Thursday snapped a nine-day winning streak, while Brent ended a seven-session run of gains. Oil futures tallied a weekly gain of more than 2% on Friday, with global benchmark crude futures at their highest settlement of the year, as tightening supplies outweighed worries about demand from China and the global economy. The most important trading venue for European Brent Crude Oil is the International Petroleum Exchange in London.Brent crude prices settle at a fresh 2023 high on Friday Other reference oil types include Leona, Tijuana, Alaska North Slope, Zueitina or Urals. The reference oil traded most frequently and of major significance for the USA is West Texas Intermediate (WTI), while the most important in Asia is Dubai Fateh. These are standardised products used to determine the prices for all other types. For the purposes of trading on futures exchanges in London or New York, however, reference oils are used. The types of crude oil come from regions as diverse as Alaska North Lope, Arab Light or Zueitina in Libya. On an international level there are a number of different types of crude oil, each of which have different properties and prices. In December 2005 the global demand for crude oil was 83.3 million barrels per day according to the International Energy Agency (IEA) and this will continue to rise further. The US investment bank Goldman Sachs estimates the proportion of crude oil used for primary materials production to be 45 per cent.īecause the crude oil industry has developed hardly at all in recent years due to a lack of investment capital for discovery, extraction and further processing, global production can barely meet the high demand for crude oil from countries such as the USA, China or India. Because crude oil is needed to manufacture other primary materials, it is the world’s most important commodity.
Because the supply of crude oil is limited but demand is constantly increasing, the price of oil is also continuously rising. Crude oil is also used in cosmetics and medicines. From there, the crude oil is transported by tanker.īesides its primary role as the most important energy source, crude oil is also an essential raw material for manufacturing plastics. Brent Crude is a particularly light crude oil which is carried from the North Sea to the Sullom Voe Terminal on Mainland, Shetland by an underwater pipeline. The most important type of crude oil used in Europe is Brent Crude, named after the North Sea oilfield where it is extracted.
The commodity of crude oil is by far the world’s most important energy source and the price of oil therefore plays an important role in industrial and economic development.
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