Oil pushes higher as tightening market drives Brent back to US$95

Oil rose, aided by signs of a tightening market and as a selloff in global stock markets paused.

Brent futures, the global benchmark, climbed above US$95 a barrel. The premium for near-term barrels of U.S. benchmark West Texas Intermediate is at the highest level in more than a year, indicating a deficit. Official data due later Wednesday may confirm another draw in crude inventories at an important U.S. storage site.

While oil’s rally has rekindled talk of $100-crude, the gains had stalled over the past week. Key consumer India has noted the negative effects of higher prices on its economy, which raises some questions about the demand outlook into next year. Inventories have been falling in most regions though, most notably at the U.S. futures delivery point of Cushing, Oklahoma.

“My fear in this market is we have de-stocked so much inventory,” Amrita Sen, co-founder and head of research at consultant Energy Aspects, told Bloomberg TV. “Right now, what’s going on in the U.S. — Cushing is dry.”