Petroleum prices traded higher Wednesday as expected tight crude supply for the rest of the year offset inflation concerns.
Saudi Arabia and Russia’s extension of 1.3 million barrels per day (bpd) of crude oil production cuts to the end of this year will lock in a substantial market deficit through the fourth quarter, the International Energy Agency (IEA) said on Wednesday.
Continuing supply cuts could lift Brent futures above the $100 a barrel threshold before the end of the year, Bank of America analysts said on Wednesday.
The U.S. Bureau of Labor Statistics said on Wednesday stateside consumer prices rose in August by their most in more than a year, driven by a 10.6% increase in retail gasoline prices.
Excluding volatile food and energy components, the consumer price index rose by 0.3%.
Benchmark Brent futures rose 40 cents, or 0.43%, to $92.46 a barrel, while U.S. West Texas Intermediate crude gained 41 cents, or 0.46%, to $89.25.
The IEA’s fourth-quarter demand growth forecast, meanwhile, was revised down by 600,000 bpd in what experts said was a sizable adjustment.