Oil pushes closer to $US95 a barrel as global market tightens up

Oil extended an upswing as OPEC+ supply cuts tightened the market, with Saudi Energy Minister Prince Abdulaziz bin Salman due to address a conference on the kingdom’s crude policy and view on net zero.

Global benchmark Brent advanced well above $US94 a barrel after a three-week run of gains that boosted prices by 11 per cent. With Saudi Arabia and Russia prolonging supply curbs to the year-end, Prince Abdulaziz is set to be among keynote speakers at the World Petroleum Congress in Calgary later on Monday.

Crude in London is nearly 10 per cent higher year-to-date as the OPEC+ linchpins curb production and the demand outlook brightens, with the US potentially avoiding recession just as refiners in China go all-out. Against that backdrop, crude stockpiles have dropped, while speculators boosted net-bullish wagers on Brent and US benchmark West Texas Intermediate to a combined 15-month high.

Oil’s surge looks set to fan inflationary pressures around the globe just as central bankers, including those at the US Federal Reserve, try to determine whether they have already done enough to beat back the pace of price gains by increasing interest rates. It will be an important week for monetary policy, with decisions due from the Fed and the Bank of England, among others.

“Focus is likely to turn to the Fed meeting this week, but growing supply tightness and eroding inventories are likely to continue underpinning bullish sentiment,” said Vandana Hari, founder of consultancy Vanda Insights.