Oil Pushes Higher as Tightening Market Drives Brent Toward $95

Oil rose, aided by signs of a tightening market and improved sentiment in equity markets.

(Bloomberg) — Oil rose, aided by signs of a tightening market and improved sentiment in equity markets. 

Brent futures, the global benchmark, climbed toward $95 a barrel. The premium for near-term barrels of US benchmark West Texas Intermediate is at the highest level in more than a year, indicating a deficit. Official data due later Wednesday may confirm another draw in crude inventories at an important US storage site.

US futures are set for their biggest quarterly jump since early 2022 as OPEC forecasts a shortfall of as much as 3 million barrels a day from October on the back of supply cuts by Saudi Arabia and Russia. 

While the rally has rekindled talk of $100-crude, the gains have stalled over the past week. Key consumer India has noted the negative effects of higher prices on its economy, which raises some questions about the demand outlook into next year.

“While the market remains tight for now, the outlook for 2024 is fading fast, potentially leaving OPEC with some tough decisions in a few months time,” said Ole Hansen, head of commodities strategy at Saxo Bank.

On Tuesday, the industry-funded American Petroleum Institute reported that inventories at the storage hub in Cushing, Oklahoma, declined again last week, although nationwide stockpiles climbed, according to a person familiar with the data. A separate estimate from AlphaBBL Corp. also pointed to a drop at Cushing, where holdings have already sunk to the lowest since mid-2022. 

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