Oil Advances as IEA Adds to Chorus of Views on Tighter Outlook

Oil climbed toward a 10-month high after the International Energy Agency added to warnings of a supply shortfall.

West Texas Intermediate traded near $89 a barrel, after dipping 0.4% on Wednesday. Demand will eclipse supply by 1.2 million barrels a day on average during the second half, the IEA projected Wednesday. That came a day after OPEC and the US also said they saw global consumption exceeding production.

The bullish outlooks added momentum to a rally that started in mid-June as Saudi Arabia and Russia curbed supply while US and Chinese demand proved relatively resilient. WTI has risen 13% over the past three weeks, and timespreads are in a bullish backwardated pattern, indicating scarce supply.

WTI for October delivery rose 0.4% to $88.85 a barrel at 9:20 a.m. in Singapore. Brent for November settlement gained 0.4% to $92.22 a barrel.

Source: Bloomberg