Oil market remains tight as prices inch towards 9-month high

Oil market remains tight as prices inch towards 9-month high

Muscat: Oil prices roared towards the $90 per barrel mark following consistent gains since the fourth week of July-2023, according to a new report.

“The most recent support to prices came from record demand from Asian refiners for US crude deliveries amid obstacles that included high temperatures impeding pipeline deliveries to ports in the US. Reports of continued buying of Saudi crude oil by China also supported prices,” Kamco Invest said in its Oil Market Monthly Report August 2023.

Both WTI and Brent traded in larger backwardation indicating scarce supplies in the near term. Voluntary cuts from Opec+, Saudi Arabia and Russia have supported oil prices since last month. Nevertheless, an increase in crude stocks in the US as well as a revision to Chinese economic data indicating a slower-than-expected recovery in demand in China and globally partially offset the overall rally.

Data on weekly crude oil inventories in the US showed a record draw-down during the week ended 28 July 2023 by 17 million barrels led by higher refinery runs coupled with increased crude oil exports, especially to Asian buyers. However, the report had minimal impact on prices as it coincided with the downgrade of sovereign ratings for the US by Fitch