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Brent crude futures rose 52 cents to $94.45 a barrel by 1039 GMT
while U.S. West Texas Intermediate crude futures were up 66
cents at $91.43.
Brent and WTI have climbed for three consecutive weeks to touch
their highest since November and are on track for their biggest
quarterly increases since Russia's invasion of Ukraine in the
first quarter of 2022.
"What’s striking is that this relentless oil price rally has
taken place even amid concerns about lower demand from Europe
and China as those economies grapple with a severe slowdown,
which demonstrates just how tight the supply side of the
equation has become," said Marios Hadjikyriacos at broker XM.
China, considered the engine of oil demand growth, remains
possibly the biggest risk because of its sluggish post-pandemic
economic recovery.
However, a series of stimulus measures and a summer travel boom
helped industrial output and consumer spending to rebound last
month and Chinese refineries ramped up output, driven by strong
export margins.
"Lack of protracted progress, nonetheless, will be viewed as a
major setback on the demand side," said Tamas Varga of oil
broker PVM.
Eyes will also be on central banks this week, including an
interest rate decision from the U.S. Federal Reserve and eagerly
awaited economic data out of China.
There is growing consensus that peak interest rates are not far
away as inflationary pressure, in general, has been successfully
mitigated, PVM's Varga said.
"Investors, however, remain puzzled over when central banks will
start cutting them," he said. "The high-for-longer mantra would
ultimately have a negative impact on economic growth and would
affect oil demand."
Saudi Arabia and Russia this month extended supply cuts to the
end of the year, but whether those cuts will extend into next
year is uncertain.
"The question is, will the Saudis continue to maintain the
deficit given the risk that higher prices must surely, at some
point, stimulate US shale (oil output)," Investec analyst Callum
Macpherson said.
(Reporting by Natalie Grover in London and Florence Tan and
Sudarshan Varadhan in SingaporeEditing by David Goodman)
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