Oil rises on supply concerns and China’s demand recovery. On Monday, oil prices jumped for a third straight day on expectations of a wider fourth-quarter supply gap after Saudi Arabia and Russia extended cutbacks and a demand recovery in China, the world’s biggest crude importer.
Brent crude prices increased 39 cents, or 0.4%, to $94.32 a barrel at 0253 GMT, while U.S. West Texas Intermediate futures rose 53 cents, or 0.6%, to $91.30.
“China’s stimulus policy, resilient U.S. economic data, and OPEC+’s ongoing output cuts are the bullish factors that support the oil market’s upside movement,” CMC Markets analyst Tina Teng said, referring to China’s central bank’s reserve ratio cut last week to boost liquidity and the economy.
This week, traders will monitor central banks, notably the U.S. Federal Reserve, and discuss interest rate policies and Chinese economic statistics.
Brent and WTI have risen to their highest levels for three weeks since November and are on course for their greatest quarterly increase since Russia invaded Ukraine in 2022.
ANZ analysts noted that Saudi and Russian output cuts might cause a 2 million barrels per day (bpd) deficit in the fourth quarter, and a subsequent inventory drain could expose the market to further price rises in 2024.
Saudi Arabia and Russia extended supply cuts to the end of the year as part of OPEC+ and as Chinese refineries increased output due to good export profits.
“It seems like prices will easily find a home above $90 a barrel, which means the focus might shift to the world’s two largest economies’ demand outlook,” said OANDA analyst Edward Moya.
According to ANZ, the International Energy Agency, and OPEC, global oil demand growth is expected to reach 2.1 million bpd.
