LONDON, Sept 13 (Reuters) – Oil prices traded higher on Wednesday as expected tight crude supply for the rest of the year offset inflation concerns.
Saudi Arabia and Russia’s extension of 1.3 million barrels per day (bpd) of crude oil production cuts to the end of this year will lock in a substantial market deficit through the fourth quarter, the International Energy Agency (IEA) said on Wednesday.
The continuing supply cuts could lift Brent futures above the $100 a barrel threshold before the end of the year, Bank of America analysts said on Wednesday.
U.S. consumer prices rose in August by their most in more than a year, the Bureau of Labor Statistics said on Wednesday, driven by a 10.6% increase in retail gasoline prices.
Excluding volatile food and energy components, the consumer price index rose by 0.3%.
Benchmark Brent futures rose 40 cents, or 0.43%, to $92.46 a barrel by 1252 GMT while U.S. West Texas Intermediate (WTI) crude gained 41 cents, or 0.46%, to $89.25.
Front-month Brent futures contracts traded as high as $4.68 a barrel above those for delivery six months further out on Tuesday, a width of spread not breached since last November, indicating tighter market supply.
Meanwhile, forecasters expect the European Central Bank to raise interest rates at its meeting on Thursday.
The IEA’s fourth-quarter demand growth forecast, meanwhile, was revised down by 600,000 bpd in what Investec analyst Callum Macpherson said was a significant adjustment.
“The deficit is now broadly equal to the Saudi additional voluntary cut,” he said.
The Organization of the Petroleum Exporting Countries (OPEC) on Tuesday stuck to its forecasts for robust growth in global oil demand in 2023 and 2024.
Four oil ports shut in by powerful storms in Libya reopened on Wednesday.
Reporting by Robert Harvey, Yuka Obayashi and Muyu Xu Editing by David Goodman