Oil near highest level in more than 3 months, with focus on ‎tight supply

Oil prices rose 1% today, Thursday, to compensate for the losses of the previous session, after the scarcity of supply and expectations of an increase in Chinese demand overshadowed concerns about the economic slowdown.

By 0522 GMT, Brent crude futures rose 72 cents, or 0.9%, to $83.64 a barrel. US West Texas Intermediate crude also rose 78 cents, or 1%, to $79.56 a barrel, heading towards its highest level since April 19.

According to “Reuters”, oil prices fell on Wednesday, after data showed that US crude stocks fell less than expected, and the Federal Reserve (the US central bank) raised interest rates by a quarter of a percentage point, leaving the door open for another hike.

Although the Federal Reserve’s move was expected, the market’s focus shifts to the Organization of the Petroleum Exporting Countries and its allies (OPEC +), as the coalition’s joint ministerial monitoring committee holds its monthly meeting next week.

The committee’s expectations for demand will be key in determining whether Saudi Arabia will decide to extend the voluntary production cut of one million barrels per day until September.

Saudi Arabia cut its production to 9 million bpd in July from about 10 million bpd, the biggest cut in years. It said early this month that it would extend the cut until August

Meanwhile, market sentiment is still supported by China’s pledge earlier this week to take more steps to boost growth.

“The Chinese authorities have indicated that they will intensify support measures to revive the faltering Chinese economy, which in turn stimulated hopes of increasing oil demand from the world’s largest importer of crude oil,” analyst Priyanka Sachdeva of Philip Nova said in a note.