Crude oil faced a challenging trajectory in 2023, lagging behind various financial assets, and is on track to end the year in the red. Despite robust demand sustained by the global economy’s resilience in the face of inflation and high interest rates, oil struggled to maintain its momentum.
OPEC Cuts Ineffective: The West Texas Intermediate (WTI) grade, known for its lower sulfur content, began the year with a modest 3.7% gain, only to grapple with a turbulent journey throughout.
Crude oil’s trajectory was uneven through the COVID-19 years, pulling back by 21% in 2020 followed by a strong 51% rebound in 2021. However, 2023 told a different story.
Starting this year at $80.18, WTI witnessed volatility in the first half, surging above $90 in September before reversing course. Currently, it’s trading down about 8% for the year.
The United States Oil Fund, LP (NYSE:USO), which tracks WTI crude oil, reflects this trend, showing a 1.1% year-to-date loss.
Chart Courtesy of Benzinga
The price weakness has come despite some of the members of the OPEC+ oil coalition persisting with their voluntary production cuts and talking up the commodity. Saudi Arabia, a major member of OPEC+, and a few other member countries began cutting oil production in May after the commodity fell below the psychological resistance of $65 in late March.
A collective output cut of 1.66 million bpd by nine OPEC+ nations was later deepened to 2.2 million bpd in late November, according to data provided by the U.S. Energy Information Administration.
OPEC’s monthly oil production has fallen from a near-term peak just under 30 million bpd in September 2022, according to data provided by the U.S. Energy Information Administration.
Source: EIA
Data provided by the International Energy Agency in its December monthly oil market report show that the production target of OPEC+ members for November was 50.46 million bpd, comprising 36.92 million bpd from OPEC members and 13.54 million bpd from the non-OPEC allies.
See Also: Best Commodities To Buy
America, The New OPEC? Challenging OPEC’s traditional dominance, the U.S. achieved a potential new record in annual crude oil production in 2023, OilPrice.com reported, citing the latest weekly production figure reported by the EIA. This was facilitated by robust…
Click Here to Read the Full Original Article at Cryptocurrencies Feed…
