Rising momentum in oil

Oil is rising as the International Energy Agency tightens its view on a tightening outlook. Oil climbed to a 10-month high after the International Energy Agency increased its warnings of supply shortages. U.S. crude traded around $89 a barrel after falling 0.4 percent on Wednesday. The IEA forecast on Wednesday that demand will eclipse supply by an average of 1.2 million barrels a day in the second half. That came a day after OPEC and the United States also said they saw global consumption exceeding production. The bullish outlooks added momentum to a rally that began in mid-June as Saudi Arabia and Russia tightened supply and U.S. and Chinese demand remained relatively resilient. U.S. crude has risen 13 percent in the past three weeks, with time frames trending back up to suggest supply is tight. There was some bearish news on Wednesday, with government data showing U.S. domestic crude inventories snapped a five-week decline amid the highest imports since 2019. But inventories have been dwindling at the key storage hub in Cushing, Oklahoma. “It may take more than a single data point to reverse the narrative of tight supply. For now, technical conditions are moving into overbought territory in the near term,” said Yeap Jun Rong, market strategist at IG Asia Pte, referring to high inventory levels in the U.S. and raising the risk of a possible pullback in prices.