SINGAPORE- Oil prices rose nearly $1 on Wednesday as markets focused on supply tightness heading into winter and a “soft landing” for the US economy.
Brent crude futures rose 86 cents, or 0.9 percent , to $94.82 a barrel while US West Texas Intermediate crude futures climbed 86 cents, or 0.9 percent, to $91.25.
Industry data released on Tuesday showed US crude oil stockpiles rose last week by about 1.6 million barrels, against analysts’ expectations for a drop of about 300,000 barrels.
However, markets continued to worry about US crude stockpiles at the key Cushing, Oklahoma, storage hub falling below minimum operating levels.
Further drawdowns at Cushing, the delivery point for US crude futures, could also provide new upward pressure on oil markets as it would compound supply tightness stemming from supply cuts by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+.
“Oil prices are overall relatively strong amid the current tightening of supply,” said CMC Markets analyst Leon Li, however adding that price support from Russia and Saudi Arabia supply cuts may be limited through the year-end.
“(Economic) Data from countries in Europe and the United States have recently weakened … Oil prices in October may show a volatile trend as a whole. It is unlikely to exceed $100 in the short term, but it is expected to be strong.”
US government data on oil inventories is expected at 10:30 a.m. (1430 GMT). – Reuters