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Oil Hits New Highs on Supply Concerns

Petroleum prices hit new peaks on Wednesday with Brent crude touching the highest price since April, as tighter supply owing to Saudi and Russian output cuts offset concerns over slow demand from China and a report showing rising U.S. crude inventories.

Top exporter Saudi Arabia last week extended its voluntary production cut of one million barrels per day for another month to include September, and Russia said it would cut oil exports by 300,000 bpd in September.

Brent crude was up $1.00, or 1.2%, having touched $87.24 U.S., the highest price since April 13. U.S. West Texas Intermediate (WTI) crude gained 80 cents, or 1.0%, to $83.72. The U.S. benchmark touched $84.11, the highest price since November 2022.

Crude posted its sixth consecutive weekly gain last week, helped by a reduction in OPEC+ supplies and hopes of stimulus boosting oil demand recovery in China.

Some bearish pressure came from American Petroleum Institute figures on Tuesday, which according to market sources showed U.S. crude stocks rose by 4.1 million barrels last week, although gasoline and distillate inventories fell.

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