Brent Crude oil surged to $97.2 per barrel in the early hours of Thursday, September 28, bringing it to its highest level since November 2022, data obtained from Oilprice has shown.
This significant price increase was driven by the rise in demand and a marked decrease in crude oil supplies.
Saudi Arabia and Russia played a critical part in this increase, as they declared oil production cuts that would last through the end of 2023, with monthly reviews to analyse the situation.
The benchmark crossed $90 per barrel point in the first week of September for the first time in 10 months on the back of the voluntary cuts by Riyadh and Moscow.
As the Organization of Petroleum Exporting Countries (OPEC) meets on October 4, market analysts expect a thorough examination of market dynamics and a potential rethink of supply levels and prices by producers.
Last week, Goldman Sachs raised its 12-month ahead forecast for Brent Crude oil prices to $100 per barrel from $93 previously expected on more robust inventory draws with the extended OPEC+ cuts and global demand growth.
“We have nudged up our 12-month Brent forecast from $93 a barrel to $100 a barrel as we now expect modestly sharper inventory draws,” analysts at Goldman Sachs wrote in a note on Wednesday, as seen by Reuters.
The critical reasons for the higher expected Brent crude prices are that, the lower OPEC oil supply and higher demand would more than offset the rise in US oil production.
The reduction by the OPEC+ group led by Saudi Arabia and increased demand would allow the cartel and its partners to preserve Brent prices between $80 and $105 per barrel in 2024, according to the Wall Street Bank.
Goldman does not expect Brent to trade over $105 per barrel for an extended period next year, but it also does not expect prices to sell below $80 per barrel for an extended period.