Oil Prices Still Rising As Scarcity Grips Market

Oil edged higher as the impact of rapidly tightening supplies outweighed weakening risk appetite in broader markets. Oil settled near $91 a barrel, reversing earlier losses driven by investors grappling with the possibility of an extended period of higher interest rates, Julia Fanzares reported for Bloomberg News.

Oil has surged more than 25% since the end of June, heading for its most significant quarterly gain since early 2022.

Traders continue to observe signs of supply scarcity, with the premium for near-term U.S. oil barrels remaining at its highest level in over a year, indicating a market deficit.

"Crude appears well-supported, as today's initial declines were short-lived, and the market rebounded to levels seen earlier this month," said Craig Erlam, senior market analyst at Oanda.

"We may still witness further corrections, but there is no clear indication of sentiment turning bearish after such a robust rally over the summer."

Oil has surged more than 25% since the end of June, heading for its most significant quarterly gain since early 2022, thanks to supply restrictions from OPEC+ leaders Saudi Arabia and Russia.

The rally has reignited discussions of $100-a-barrel crude, although the gains lost momentum in the past week due to concerns about the overall economic backdrop.

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