Crude oil soars on supply concerns; central bank meetings in focus

investing.com:

Investing.com — Oil prices rose Tuesday, gaining for the fourth consecutive session as forecasts of a drop in U.S. shale output added to concerns about tightening global supply for the rest of the year.

By 09:20 ET (13.20 GMT), the U.S. crude futures traded 0.9% higher at $91.38 a barrel, while the Brent contract climbed 0.6% to $95.00.

Prices have gained for three consecutive weeks, and both benchmarks are around 10-month highs.

U.S. oil production from top shale-producing regions is on track to fall for a third month in a row in October to the lowest level since May 2023, the U.S. Energy Information Administration said in its monthly drilling productivity report on Monday.

Output is expected to fall to 9.393 million barrels per day in October from 9.433 million barrels in September, EIA data showed, and the estimated decline of about 40,000 barrels per day would be the biggest monthly drop since December 2022.

This has added to worries of a substantial supply deficit this year stemming from extended production cuts by Saudi Arabia and Russia.

Helping sentient Tuesday was the news that the Organisation for Economic Co-operation and Development had predicted more upbeat global growth this year, as a stronger than expected U.S. economy overshadowed a weakening Chinese economy.

The Paris-based body said it now expected global gross domestic product to grow 3.0% this year, an upgrade from 2.7% in its June outlook, before slowing to 2.7% in 2024, a drop from its estimate of 2.9% in June.

“Given the constructive fundamentals and more positive sentiment, we could see ICE Brent breaking above US$100/bbl in the not-too-distant future,” said analysts at ING, in a note. 

“However, such a move would likely be unsustainable, leading