Oil Reaches New 2023 High

As declining inventory levels alarmed the market, the price of a barrel of WTI crude oil rose to $85 on Friday, the highest level so far this year.

Around 10:00 a.m. ET, WTI crude oil dropped to $84.90 per barrel after briefly reaching $85 per barrel. In November 2022, WTI last traded at a price that high.

A new 2023 record was also set by Brent crude oil, which was trading $1.05 per barrel, or 1.21%, higher on the day at $87.88.

The United States' declining crude oil stocks, which fell by another 10.6 million barrels for the week ending August 25, according to the Energy Information Administration, are a significant contributing reason to the rising price of crude oil.

The OPEC+ coalition, which includes major players Saudi Arabia and Russia, is another factor supporting high oil prices. The two sides have agreed to reduce production, and Russia has announced it will give further information next week. The prospect that Saudi Arabia or Russia might broaden or intensify their present production cuts is being considered by the market. Most analysts anticipate that Saudi Arabia will continue to

The declining value of the dollar, which makes crude oil more accessible to holders of other currencies and increases demand, is a third factor supporting oil prices.

The Biden Administration will find it more challenging to carry out the agonizingly slow process of replenishing the country's Strategic Petroleum Reserve (SPR), which has been growing by an average of 600,000 barrels per week over the past few weeks after being drained of 300 million barrels over the last few years.

Even though 300 million barrels of crude oil left the SPR and entered commercial inventories, the remaining stocks of crude oil, excluding those in the SPR, are still more than 100 million barrels below the levels of July 2020.