The U.S. crude-oil benchmark was approaching the $90-a-barrel threshold for the first time since November early Thursday, lifted by continued concerns over the outlook for tight global crude supplies.
Price action
-
West Texas Intermediate crude
CL00,
+1.62%
for October delivery
CL.1,
+1.62%CLV23,
+1.62%
rose $1.16, or 1.3%, to $89.68 a barrel on the New York Mercantile Exchange. -
November Brent crude
BRN00,
+1.45%BRNX23,
+1.45%,
the global benchmark, was up $1.14, or 1.2%, at $93.02 a barrel on ICE Futures Europe.
Market drivers
Crude pulled back from 2023 highs on Wednesday after the Energy Information Administration reported a larger-than-expected rise in U.S. crude inventories last week. Oil had gained ground ahead of the data, after the Paris-based International Energy Agency’s monthly report reiterated a forecast for a fourth-quarter deficit in global supply as Saudi Arabia and Russia extend supply cuts through the end of the year.
“OPEC+ is currently demonstrating a remarkable display of pricing power, skillfully increasing prices without causing a significant dent in demand,” said Stephen Innes, managing partner at SPI Asset Management, in a note.
“This formidable pricing prowess can be attributed to OPEC+’s substantial market share, bolstered by its alliance with Russia, and the relatively inelastic nature of non-OPEC supply, primarily influenced by the financial discipline observed in the U.S. shale industry,” he wrote.
As long as OPEC+ keeps curbs on production and exports, oil prices will remain firm until high prices force a round of demand destruction at the gasoline pump, Innes said.
