Oil prices hit 10-month highs on mounting supply concerns
The Hindu
Oil prices rose 1.2-1.6% to 10-month highs on Tues. Weak U.S. shale output, extended OPEC+ cuts & fuel shortages in Russia drove prices up. Market is realising tight supply of crude, diesel & gasoline. U.S. output lowest since May 2023. Aramco CEO lowered long-term demand outlook. Central bank decisions this week may cause volatility.
Oil prices jumped over 1% on Tuesday to 10-month highs, as weak U.S. shale output compounded supply concerns from extended production cuts by Saudi Arabia and Russia.
Global benchmark Brent crude futures were up $1.13, or 1.2%, to $95.56 a barrel by 11:14 a.m. EDT (1514 GMT). It hit a session high of $95.96 a barrel, the highest since November.
U.S. West Texas Intermediate crude futures were up $1.48, or 1.6%, to $92.96, after reaching $93.74 a barrel, also the highest since November.
Prices are on track to gain for their fourth consecutive session.
"The market is starting to realise that wherever you look there are concerns about tight supply, whether it's crude oil, diesel or gasoline," Price Futures Group analyst Phil Flynn said. "We're getting a reality check."
Feeding those concerns, U.S. oil output from top shale-producing regions is on track to fall to 9.393 million barrels per day (bpd) in October, the lowest since May 2023, the U.S. Energy Information Administration said on Monday. That would be a third consecutive monthly fall.
Those estimates come after Saudi Arabia and Russia, as part of the OPEC+ producer group, this month extended combined supply cuts of 1.3 million bpd to the end of the year.