Oil Prices Edge Higher on Expectations of Tighter Global Supply
Oil prices edged higher on Wednesday, hovering near a 10-month high hit the previous day, as expectations of tighter global supply and fears of supply disruption in Libya outweighed concerns of slower demand in some countries such as China.
Brent crude futures rose 8 cents, or 0.1%, to $92.14 a barrel by 0054 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 14 cents, or 0.2%, to $88.98 a barrel.
Both benchmarks surged nearly 2% on Tuesday to close at their highest levels since November 2022.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed last week to extend voluntary supply cuts of 1.3 million barrels per day (bpd) until the end of the year. This is despite the fact that global oil demand is expected to grow at a slower pace in 2023 than previously thought.
The extension of the OPEC+ cuts is a sign that the group is concerned about the potential for supply disruptions, such as the recent storm in Libya that has shut down four of the country’s eastern oil terminals.
However, there are some concerns that demand for oil could slow in China, the world’s largest oil importer. China is facing a slowdown in its economy, and this could lead to lower demand for oil.
Overall, oil prices are expected to remain volatile in the near term, as the market balances the risks of tighter supply with the possibility of lower demand.
Key Takeaways
- Oil prices rose on expectations of tighter global supply.
- OPEC+ producers are expected to keep output cuts in place.
- Libya’s oil exports have been disrupted by a storm.
- Demand for oil could slow in China.
- Oil prices are expected to remain volatile in the near term.
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