NEW YORK: Oil prices jumped about 2% to a near 10-month high on Tuesday (Sept 12) on a tighter supply outlook and Opec optimism over the resilience of energy demand in major economies.

Brent futures rose US$1.42 or 1.6%, to settle at US$92.06 (RM430.61) a barrel, while US West Texas Intermediate crude rose US$1.55, or 1.8%, to settle at US$88.84 (RM415.54).

Both benchmarks remained technically overbought for an eighth straight day, and closed at their highest levels since November 2022.

The Organization of the Petroleum Exporting Countries (Opec) stuck to its forecasts for robust growth in global oil demand in 2023 and 2024, citing signs that major economies are stronger than expected. Opec’s monthly report forecast world oil demand will rise by 2.25 million barrels per day (bpd) in 2024.

“Crude prices are rallying after the Opec monthly report showed the oil market is going to be a lot tighter than initially thought,” Edward Moya, senior market analyst at data and analytics firm Oanda, said in a note.

Keeping supplies tight, Saudi Arabia and Russia last week extended voluntary supply cuts of a combined 1.3 million bpd to year end. Opec, Russia and allied producers are known as Opec+.

Opec member Libya shut four of its eastern oil export terminals due to a deadly storm, while Opec+ member Kazakhstan reduced daily oil output for maintenance.

The Opec Energy Information Administration (EIA) projected global oil output would rise from 99.9 million bpd in 2022 to 101.2 million bpd in 2023 and 102.9 million bpd in 2024, while world demand will rise from 99.2 million bpd in 2022 to 101.0 million bpd in 2023 and 102.3 million bpd in 2024.

That compares with a record 100.5 million bpd of global oil production in 2018 and a record 100.8 million bpd of world liquids consumption in 2019, according to the EIA’s Short Term Energy Outlook.

EIA said it expects global oil inventories to decline by almost a half million bpd in the second half of 2023, causing oil prices to rise with Brent averaging US$93 per barrel in the fourth quarter.

In the US, EIA projected crude output would rise from 11.9 million bpd in 2022 to 12.8 million bpd in 2023 and 13.2 million bpd in 2024, while liquids consumption would rise from 20.0 million bpd in 2022 to 20.1 million bpd in 2023 and 20.3 million bpd in 2024.

That compares with a record 12.3 million bpd of US crude production in 2019 and a record 20.8 million bpd of liquids consumption in 2005. – Reuters

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