Oil at 4-month high

Oil settled at a four-month high after the International Energy Agency revised its previous forecast of a surplus to project a supply deficit through 2024 on the assumption that OPEC+ will continue its output cuts. Brent crude fell to around $85 a barrel after rising 4.3% in the previous two sessions. U.S. crude is near $81. The IEA said in a monthly report on Thursday that it assumed OPEC and its allies would maintain their restrictions for the rest of the year to “balance oil markets.” The global benchmark rose nearly 4% this week, supported by the first decline in U.S. inventories since January and rising geopolitical tensions after Ukraine attacked another Russian refinery. Oil futures have moved out of the narrow range they have traded in this year, but there are still headwinds that could limit further gains. These include rising non-OPEC supply, Chinese demand concerns and persistent U.S. inflation that has pushed back expectations of a rate cut. Vandana Hari, founder of Vanda Insights, said the IEA revision and US inventory data supported prices, but Brent is likely to fall to lows of $80. She added that the IEA forecast is closer to the consensus and that the US is likely to intervene in Ukraine over drone strikes on Russia.