Oil prices extend gains, with Brent climbing over $95

Oil prices surged in American trade for the eighth session in a row, scaling a ten-month high, with Brent trading above $95 a barrel for the first time this year.

Markets are still focused on the prospects of extreme shortages the markets will undergo this year as Saudi Arabia and Russia extend their voluntary production cuts.

Global Oil Prices

US crude rose 0.5% to $92.63 a barrel, the highest since November 2022, while Brent rallied 1.5% to $95.91 a barrel, the highest since November 2022.

US crude rose 1.3% on Monday, while Brent added 0.4%, the seventh profit in a row, and the longest such streak of daily gains since August. 

Shortages

The International Energy Agency said the decision by Saudi Arabia and Russia to cut crude output by 1.3 million bpd until the end of the year will cause shortages in the fourth quarter of the year.

Bank of America analysts believe such cuts will send Brent prices above $100 by the end of the year.

Conversely, OPEC maintained its optimistic outlook for demand growth worldwide this year and next year,while also expecting flexible global economic growth despite higher interest rates.

US Stocks

Later today, the American Petroleum Institute will release initial data on US crude stocks, expected to show a buildup for the second week in a row.