NEW YORK: Oil prices jumped about 2 per cent to a near 10-month high on Tuesday on a tighter supply outlook and Opec optimism over the resilience of energy demand in major economies.
Brent futures rose $1.64, or 1.8pc, to $92.28 a barrel by 11:15am while US West Texas Intermediate (WTI) crude rose $1.91, or 2.2pc, to $89.20.
Both benchmarks remained technically overbought for an eighth straight day, on track for their highest settlements since November 2022.
The Organisation of the Petroleum Exporting Countries (Opec) stuck to its forecasts for robust growth in global oil demand in 2023 and 2024, citing signs that major economies are stronger than expected. Opec’s monthly report forecast world oil demand will rise by 2.25 million barrels per day (bpd) in 2024.
“Crude prices are rallying after the Opec monthly report showed the oil market is going to be a lot tighter than initially thought,” Edward Moya, senior market analyst at data and analytics firm OANDA, said in a note.
Last week Saudi Arabia and Russia had extended voluntary supply cuts of a combined 1.3m bpd to year end. Opec, Russia and allied producers are known as Opec+.
On the other hand, Opec member Libya on Saturday shut four of its eastern oil export terminals due to a deadly storm. In Opec+ member Kazakhstan, daily oil output fell to 213,800 metric tonnes on Sept 11 from 243,500 tonnes the previous day as maintenance work began on the Karachaganak gas condensate field.
Oil traders are waiting for supply-demand forecasts from the US Energy Information Administration’s (EIA) Short Term Energy Outlook (STEO) on Tuesday and the International Energy Agency (IEA) on Wednesday.
Published in Dawn, September 13th, 2023