Oil prices hover near 10-month high on supply concerns

Oil prices hover near 10-month high on supply concerns

Crude oil prices edged higher on September 13, hovering at a new 10-month high, as expectations of tighter global supply and fears of supply disruption in Libya outweighed concerns of slower demand in some countries such as China.

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The news of OPEC member Libya shutting four of its eastern oil export terminals due to a deadly storm also lent support to oil prices.  Saudi Arabia and Russia have cut their output at 1.3 million barrels per day till the end of 2023. Kazakhastan has cut its oil output as well.

The international benchmark Brent futures rose 8 cents, or 0.1 percent, to $92.14 a barrel by 0054 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 14 cents, or 0.2 percent, to $88.98 a barrel.

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Both benchmarks surged nearly 2 percent on Tuesday to close at their highest levels since November 2022.

"Bullish demand outlook by the OPEC and the U.S. Energy Information Administration's (EIA) prediction of a decline in global oil inventories reinforced market views of tightening supply going forward," Satoru Yoshida, a commodity analyst with Rakuten Securities said.

The Organization of the Petroleum Exporting Countries (OPEC) is still firm on its forecasts for robust growth in global oil demand in 2023 and 2024, the organisation has cited signs that major economies are faring better than expected despite headwinds such as high interest rates and elevated inflation.

The U.S. Energy Information Administration , maintained that global oil inventories were expected to decline by almost a half million barrels per day in the second half of 2023, causing oil prices to rise with Brent averaging $93 per barrel in the fourth quarter.

But U.S. crude oil, distillate and gasoline stockpiles rose last week, according to market sources citing American Petroleum Institute (API) figures on Wednesday.

Crude stocks rose by about 1.2 million barrels in the week ended Sept. 8, against analysts estimate of a draw of about 1.9 million barrels. Gasoline inventories rose by about 4.2 million barrels, while distillate inventories rose by about 2.6 million barrels.