Oil Rises Sharply On Tight US Supply And Biden-Xi Jinping Talks

Photo illustration (Source: Antara)

JAKARTA - Oil prices rose sharply in late trading Friday, September 10, supported by signs of tighter supply in the United States as a result of Hurricane Ida and hopes that the US-China trade will give a boost to risk assets after talks by US President Joe Biden and Chinese leader Xi Jinping. Brent crude futures for November delivery jumped 1.47 dollars, or 2.3 percent, to settle at 72.92 dollars, after hitting a high of 73.15 dollars a barrel. U.S. West Texas Intermediate (WTI) crude futures for October delivery added 1.58 percent, or 2.3 percent, to $69.72 a barrel. Brent rose 0.4 percent. Brent has rallied 41 percent so far this year due to supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and some recovery in demand from the pandemic. About three-quarters of US Gulf offshore oil production, or about 1.4 million barrels per day, remains been suspended since late August. That's roughly the same as that of OPEC member Nigeria. While China is releasing oil from its strategic oil reserves, the amount is more than offset by production cuts in the Gulf of Mexico, Flynn added.

Oil and equity markets also got a boost from news of a phone call between US President Joe Biden and his Chinese counterpart Xi Jinping. The talks raised hopes for warmer relations and more global trade, analysts said. "The Biden-Xi phone call has had the same effect on oil markets as it has on other asset classes," said Jeffrey Halley, analyst at brokerage OANDA. added rigs in the last week. Energy services provider Baker Hughes said it indicated production may increase in the coming weeks. On Thursday (9/9/2021), both crude contracts fell more than 1.0 percent after China said it would release its crude reserves through a public auction to help ease its stockpile. high feedstock costs for refiners. Next week's focus will be on the revised oil demand outlook for 2022 from OPEC and the International Energy Agency. OPEC is likely to revise down its forecast on Monday, September 13, two OPEC+ sources said.