WTI steadies after passing $92 as EIA warns of US crude output slowdown

On Tuesday, US WTI crude is reaching new ten-month highs. According to reports, the US shale output may fall faster than anticipated. Aiming at $100 per barrel, the outlook for oil is firmly favourable. In Tuesday’s trading session, WTI crude oil barrels briefly crossed the $93.00/bbl mark, before retreating to $90.85 as at the time of writing.

As supply shortage concerns send investors scrambling, the price of petroleum barrels is slowly rising as a result. US shale output will continue to decline, pushing oil prices upward. The US shale output is expected to continue to fall in October, according to the Energy Information Agency (EIA). Shale output is expected to be 9.393 million bpd, the lowest level since May of this year, according to the EIA’s Drilling Productivity Report.

Since Saudi Arabia and Russia extended its 1.3 million bpd output cutbacks through the end of the year, crude prices have been under intense pressure. In just four weeks, WTI crude prices have increased 15% as oil traders worry about a global supply shortage.

A 2 million bpd shortfall in the global oil supply chain is anticipated by the first quarter of 2024. Global oil reserves are anticipated to disappear entirely due to such a severe shortage unless more crude output projects are launched and capacity is recovered.

As crude prices rise, WTI has closed in the green for ten out of the last twelve weeks and is challenging ten-month highs. US oil briefly traded above $92 per barrel before falling back below $91.50. Oil prices will test $92.50 on the upside, a level that has historically received strong resistance.