Oil gains as IEA adds to chorus of views seeing tight market
BNN Bloomberg
Oil rose toward US$90 a barrel after the International Energy Agency became the latest voice to say the market faces a significant deficit in the second half of this year.
West Texas Intermediate added 0.6 per cent after closing Tuesday at the highest since November. Demand will eclipse supply by 1.2 million barrels a day on average during the second half, the IEA said Wednesday. That comes hot on the heels of a forecast from the Organization of Petroleum Exporting Countries that the fourth quarter may see the biggest deficit in over a decade. The US Energy Information Administration predicts a more modest gap.
The numbers reinforce a marked shift in sentiment in recent weeks. Options pricing shows growing demand for bullish call options, and key timespreads are trading in a bullish backwardation, indicating scarce supply.
