Oil prices hit a 10-month high, with the possibility of being on track to exceed $100 per barrel for Brent Crude.
At the time of writing, Brent Crude is trading at a little over $94. This means that prices have risen by about 30% over the current quarter compared to the June price of $72, which is the highest quarterly jump since Russia’s invasion of Ukraine forced oil prices well over $100 per barrel.
The supply situation has tightened due to rising demand from China and strong performance in the aviation industry, combined with recent decisions by Saudi Arabia and Russia to extend their voluntary production cuts by another month. OANDA analyst Edward Moya said to The Guardian about this:
“Betting on oil is becoming a favourite trade on Wall Street. No one is doubting the Opec+ (oil output) decision at the end of last month will keep the oil market very tight in the fourth quarter.”
While rising prices are good news for oil and gas companies like ExxonMobil, the maker of the Mobil grease, coolant, and lubricant range, it leads to higher prices for motorists and other vehicle users at the petrol pump. They also have consequences for central banks, like the Bank of England, as it tries to get inflation back toward its 2% target, although it often bases its decisions on core inflation, which removes volatile aspects like food and fuel rather than headline inflation. The drop in oil prices earlier this year has helped with bringing headline inflation down.
