Following a brief decline the previous day, oil prices increased on Thursday as traders’ attention returned to the prospect of a limited supply of crude for the remainder of 2023. International benchmark Brent futures increased 17 cents to $92.05 a barrel, while West Texas Intermediate crude (WTI) increased 19 cents to $88.71.
The International Energy Agency (IEA) warned on Wednesday that the extension of Saudi Arabia and Russia’s oil production cutbacks to the end of 2023 will result in a significant market deficit through the fourth quarter, mostly sticking to its projections for demand growth this year and next.
On Tuesday, the Organisation of the Petroleum Exporting Countries (OPEC) maintained its projections for a significant increase in the world’s oil consumption in 2023 and 2024. Prior to news showing a surprising increase in U.S. crude and fuel stockpiles that alarmed markets about demand, both benchmarks on Wednesday reached 10-month highs.
As refiners increased activity, fuel stocks also increased more than anticipated. On the economic front, the most recent measurement of U.S. inflation was viewed by investors as a confirmation that the Federal Reserve will not raise interest rates next week and may perhaps extend its pause further, bolstering expectations for robust oil consumption. Higher interest rates make borrowing more expensive for households and businesses, which might stifle economic expansion and lower demand for oil.
