Oil prices soared to three-month highs on Tuesday, boosted by hints of tighter supply and Chinese government commitments to support the world’s second-largest economy.
Brent futures closed up 90 cents at $83.64 a barrel after reaching an all-time high of $83.87 earlier in the day.
West Texas Intermediate (WTI) crude in the United States gained 89 cents to $79.63. The contract had previously risen to $79.90 per barrel, its highest level since April 19.
Crude benchmarks have already gained four weeks in a row, with supplies projected to tighten as a result of output curbs by the Organization of Petroleum Exporting Countries (OPEC) and allies.
Earlier-loading Brent contracts are selling above later loadings, indicating traders forecast constrained supply, with the six-month spread approaching a two-and-a-half-month high.
“The market is becoming increasingly concerned about the trend of tightening oil supplies, and it’s becoming clear to skeptics that the expected drop-off in demand isn’t happening,” Price Futures Group analyst Phil Flynn said.
Leaders in China, the world’s second-largest oil consumer, committed to strengthen economic policy assistance.
Despite this, some economic statistics hindered improvements. According to a study, business activity in the Eurozone fell more than expected in July.
According to a highly monitored poll, business activity in the United States dropped to a five-month low in July. However, declining input prices and slower hiring suggest that the Federal Reserve may be making progress in its efforts to decrease inflation. Markets expect both the Fed and the European Central Bank to raise interest rates by 25 basis points this week.
According to market sources citing American Petroleum Institute numbers on Tuesday, crude oil and distillate inventories in the United States increased last week, but gasoline inventories declined.
According to sources who spoke on the condition of anonymity, crude stocks increased by roughly 1.32 million barrels in the week ending July 21. Gasoline inventories decreased by approximately 1.04 million barrels, while distillate inventories increased by approximately 1.61 million barrels.
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