Oil prices are nearing $95 a barrel as global markets tighten

Global benchmark Brent rose to $95 a barrel, extending a strong rally fueled by supply cuts by OPEC+ leaders.

The gains in recent sessions have coincided with a rise in key time frames, suggesting the market is undersupplied while bullish call options are also becoming more expensive. In the physical market, refined products like diesel are increasingly a red flag, and the world’s refineries are proving powerless to produce enough industrial fuel. The prices are far higher than those for crude oil.

Meanwhile, Saudi Energy Minister Abdulaziz bin Salman Al Saud said at the World Petroleum Congress in Calgary that energy markets need to be regulated and that the OPEC+ alliance’s measures target volatility, not prices.

Thanks to OPEC+ restrictions, oil prices have risen about 10% this year. U.S. crude inventories fell and speculators increased net upside bets on Brent and U.S. benchmark West Texas Intermediate to a combined 15-month high. The global demand outlook has also brightened as the US may be able to avoid a recession while refiners in China are doing their best. But Prince Abdulaziz warned on Monday that the outlook for Chinese demand remains uncertain.

The rise in oil prices is likely to increase inflationary pressures around the world as central bankers consider whether to raise interest rates further. This will be an important week for monetary policy, with decisions coming from the Fed and the Bank of England, among others.

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