Oil prices rose in early trading on Thursday after falling slightly in the previous session, as markets returned to focus on expectations of a scarcity of crude supply during the rest of 2023.
The International Energy Agency said on Wednesday that Saudi Arabia and Russia's extension of oil production cuts until the end of 2023 will mean that the market will witness a significant shortage during the fourth quarter, while it largely stuck to estimates of demand growth this year and next.
The Organization of the Petroleum Exporting Countries (OPEC) also stuck to its expectations for strong growth in global oil demand in 2023 and 2024.
Price action
Brent crude futures rose 17 cents to $92.05 a barrel at 12:02 GMT, while US West Texas Intermediate crude rose 19 cents to $88.71.
Both benchmarks jumped to their highest levels in 10 months yesterday, Wednesday, before data showed a sudden increase in crude and fuel inventories in the United States, which raised market concerns about demand.
Meanwhile, crude inventories in the United States rose by four million barrels last week, missing analysts' expectations in a Reuters poll for a decline of 1.9 million. Fuel stocks also rose more than expected as refineries boosted their production.
On the economic front, investors interpreted the latest inflation reading in the United States as confirmation that the Federal Reserve will not raise interest rates next week and may extend the pause in the monetary tightening cycle, reviving hopes for strong demand for oil.
High interest rates increase borrowing costs for companies and consumers, which may slow economic growth and reduce demand for crude.
