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Oil inches higher on supply concerns, China demand recovery

Monday,   18-Sep-2023   08:25 AM (IST)

Oil prices inched higher on Monday, buoyed by forecasts of a widening supply deficit in the fourth quarter after Saudi Arabia and Russia extended cuts and on optimism of a demand recovery in China, the world's top crude importer. Brent crude futures rose 5 cents, or 0.1%, to $93.98 a barrel by 0027 GMT while U.S. West Texas Intermediate crude was at $90.92 a barrel, up 15 cents, or 0.2%. Brent and WTI have climbed for three consecutive weeks to touch their highest levels since November after Saudi Arabia and Russia extended supply cuts to the end of the year as part of the OPEC+ group's plans and as Chinese refineries ramped up output, driven by strong export margins. Both contracts are also on track for their biggest quarterly increase since Russia's invasion of Ukraine in the first quarter of 2022. Global oil demand growth, on the other hand, is on track to hit 2.1 million bpd, they added, in line with forecasts from the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC). Traders will be watching decisions by central banks, including the Federal Reserve, this week on interest rate policies. A pause in U.S. rate hikes could weaken the greenback which makes dollar-denominated commodities such as oil more affordable for holders of other currencies.