Oil rises a little on supply worries and recovering Chinese demand

18 Sep 2023 , 10:48 AM

Oil prices edged up a little bit on Monday, supported by predictions of a growing supply gap in the fourth quarter after Saudi Arabia and Russia extended cutbacks and on hope for a revival in demand in China, the largest petroleum importer in the world.

Brent crude futures had increased by 5 cents, or 0.1%, to $93.98 per barrel, while U.S. West Texas Intermediate crude had increased by 15 cents, or 0.2%, to $90.92 per barrel.

After Saudi Arabia and Russia extended supply curbs through the end of the year as part of the OPEC+ group’s plans and as Chinese refineries increased output, propelled by solid export margins, Brent and WTI have surged for three straight weeks to reach their highest levels since November.

Additionally, after Russia’s invasion of Ukraine in the first quarter of 2022, both contracts are expected to experience their highest quarterly growth.

On the other hand, the increase in global oil consumption is anticipated to reach 2.1 million bpd, in accordance with projections from OPEC and the International Energy Agency.

The Federal Reserve and other central banks’ actions this week regarding interest rate plans will be closely watched by traders.

A delay in U.S. rate increases may cause the dollar to decline, making commodities like oil priced in dollars more accessible to owners of other currencies.

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