Continuing Concerns Over Tight Supplies Drive Prices Higher

Price Action

  • West Texas Intermediate crude (WTI) for October delivery rose 45 cents, or 0.5%, to $90.61 a barrel on the New York Mercantile Exchange.
  • November Brent crude, the global benchmark, was up 44 cents, or 0.5%, at $94.14 a barrel on ICE Futures Europe.

Both WTI and Brent are on track for weekly gains of 3.6% and 3.8% respectively.

Market Drivers

WTI settled at $90.16 a barrel on Thursday, marking its highest finish for a front-month contract since November 7. Meanwhile, Brent saw its highest close since November 15.

Crude oil prices have been soaring due to tightening supplies. Saudi Arabia's 1 million-barrel-a-day production cut, implemented in July and extended through the end of the year, along with a supply cut from Russia, have solidified expectations for a growing supply deficit in the fourth quarter.

While the supply deficit is likely to support oil prices at high levels, concerns about demand in a cooling global economy suggest caution against anticipating further price gains, according to Barbara Lambrecht, a commodity analyst at Commerzbank.

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