WTI Approaching $90 As Market Tight

Oil prices rose around 1.5% on Tuesday to be up about 6% this month. The market was buoyed by OPEC continuing to expect 2023 demand to rise by 2.4mbd and 2024 by 2.2mbd.

• WTI rose 1.7% to close at $88.78/bbl, down slightly from the intraday high of $89.37. It has started today steady at $88.80. It cleared $88.15 and is now approaching the psychologically important $90 level. Its relative strength index is signalling that it is overbought.
• Brent is 1.5% higher at $91.99. It traded above the significant $90 level throughout the day with a low of $90.52. It broke $92 clearly to make a high of $92.40, a new high for the year. It cleared resistance at $91.45 and the next level to watch is $92.91, 17 November 2022 high.
• The US EIA also released its market report on Tuesday and revised up Q4 2023 WTI prices 2.4% to $79.65 and Brent +2.2% to $84.46 due to tighter supply as indicated by lower inventories but higher inventories in H2 2024 should see Brent fall to an average $87. OPEC is expecting a shortfall of 3.3mbd in Q4 2023 but the EIA only 230kbd.
• Bloomberg is reporting that US crude stocks rose 1.17mn barrels in the latest week after a couple of sharp drawdowns, according to people familiar with the API data. But inventories at Cushing fell 2.42mn. Gasoline stocks rose 4.2mn and distillate +2.59mn.