Oil up, Brent exceeds $85 for first time in two weeks

Oil drilling rigs

Oil prices closed higher today, Aug. 30, as US crude inventories declined during the week ended Aug. 25 and as Hurricane Idalia threatened supplies.

Data from the US Energy Information Administration (EIA) showed that oil inventories decreased by 10.6 million barrels to 422.9 million barrels last week, continuing to drop for the third week in a row, compared to expectations that indicated a decline of 5.2 million barrels.

Russia is in talks with OPEC+ about the possibility of extending oil export reductions until October. However, no decision has been taken yet, TASS reported.

According to government data, oil and gas production in Brazil rose, exceeding the previous record level in June. Production increased to 4.48 million barrels of oil equivalent per day during July, with oil production alone rising by 18.6% on an annual basis to

3.51 million barrels per day.

Barclays Bank reduced its forecast for Brent crude this year to $84 per barrel from $87 previously expected. The bank's estimate for the fourth quarter of $92 per barrel remained unchanged, Reuters reported.

The lender raised its forecast on Brent over the next year by $8 to $97 per barrel, citing an expected slowdown in the growth of shale oil in the US and the continued lack of production from many OPEC+ producers.

Investors are also watching Hurricane Idalia, as it moves over the Gulf of Mexico to the east of major oil and natural gas production sites. The region accounts for about 15% of US oil production and about 5% of natural gas production, according to the EIA.

Brent crude futures for November delivery rose 0.4%, or 33 cents, to settle at $85.24 a barrel— recording the highest close since Aug. 14.

WTI crude for October delivery also rose by 0.55%, or 47 cents, to $81.63 per barrel—continuing its gains for the fifth session in a row.