Oil rises to highest in 2023 on tight supply expectations

Houston, Sept. 14 (BNA): Oil prices climbed on Thursday to their highest this year, as expectations of tighter supply outweighed worries about weaker economic growth and rising U.S. crude inventories.

Brent crude rose $1.82, or 1.98%, to settle at $93.70, after touching $93.89, its highest since November 2022, Reuters reported.

U.S. West Texas Intermediate crude (WTI) gained $1.64, or 1.85%, to $90.16, closing above $90 for the first time since November.

On Wednesday, the International Energy Agency said Saudi Arabia and Russia’s extended oil output cuts will result in a market deficit through the fourth quarter. Prices briefly pulled back on a bearish U.S. inventories report before resuming their climb.

Both benchmarks remained in technically overbought territory.

A day before the IEA report, the Organization of the Petroleum Exporting Countries (OPEC) issued updated forecasts of solid demand and also pointed to a 2023 supply deficit if production cuts are maintained.

The European Central Bank raised its key interest rate to a record peak but signalled this was likely its final move to tame inflation.

Investors see a 97% likelihood the U.S. Federal Reserve will hold interest rates steady in its next meeting on Sept. 20, according to the CME FedWatch Tool.

Meanwhile, China’s central bank said it would cut the amount of cash that banks must hold as reserves for the second time this year to boost liquidity and support the country’s economic recovery.

China is the world’s second-largest oil consumer and its economic recovery has remained choppy, worrying markets about demand.

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