Oil steadied after rallying to a 10-month high on forecasts by OPEC and the US that output cuts will tighten the market in the months ahead. West Texas Intermediate traded near $89 a barrel, after rising 1.8% on Tuesday. The Organisation of Petroleum Exporting Countries said it expects a shortfall of 3.3 million barrels a day in the fourth quarter, while the US Energy Information Administration predicted a more modest 230 000-barrel deficit.
These numbers will cause some to question OPEC’s claims that their main objective is to keep the market balanced as their own numbers clearly do not show this,” said Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. “Some key consuming nations will be getting a bit concerned about stronger prices.