Oil opened the new quarter on the front foot, edging higher on widespread bets that global demand is running ahead of supply.
West Texas Intermediate advanced above $91 a barrel after soaring 29% in the three months to September, the biggest third-quarter gain in almost two decades. Holidays in many Asia-Pacific nations on Monday, including China and India, may constrain trading volumes in risk assets such as commodities.
Oil has rallied since mid-June after the Organization of Petroleum Exporting Countries and its allies curbed crude supplies, Russia banned exports of diesel, and official US data confirmed a collapse in crude stockpiles at the vital hub in Cushing, Oklahoma. The upsurge — which has also been supported by robust demand – has rekindled speculation that $100-a-barrel pricing may return.
“The latest wave of strong, upward momentum from supply worries was exhausted by the end of last week,” said Vandana Hari, founder of Singapore-based analysis firm Vanda Insights. Oil’s likely to head into a consolidation phase while awaiting further cues, she added.
The Adipec summit in Abu Dhabi this week, the biggest Middle Eastern energy conference, may offer fresh insights into what’s in store for the crude market this quarter. Scheduled speakers include United Arab Emirates’ energy minister Suhail Al Mazrouei, and Haitham Al-Ghais, secretary-general of OPEC.
Widely watched metrics point to tighter conditions. WTI’s prompt spread — the gap between its two nearest contracts — was near $2 a barrel in backwardation, a bullish pattern. That compares with 80 cents a barrel a month ago.
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