Oil held near a four-month high after the International Energy Agency forecast a supply deficit through 2024 — in contrast to its previous projection of a surplus — on the premise OPEC+ maintains production cuts.

Brent traded near US$85 a barrel, after advancing 4.3 per cent over the previous two sessions and reaching the highest level since November on Thursday. In addition to the IEA’s shifting view, the rally was also spurred by buying from technical traders as prices snapped out of the range they’ve been in for months.

Crude has also been supported this week by the first drop in US stockpiles since January. Geopolitical tensions remain high after Ukraine attacked another Russian refinery and continued volatility in the Red Sea, adding to upward prices pressure. Options markets have also struck a more optimistic tone in recent days.

Even as oil futures break out of their recent range, some headwinds may limit further gains. These include rising non-OPEC supply and softer physical markets as refineries go through seasonal maintenance.

“Oil prices remain well supported,” Commerzbank analysts including Barbara Lambrecht and Carsten Fritsch wrote in a report. “The situation in the Red Sea remains difficult and the oil market is undersupplied in the second quarter.”

Prices:

• Brent for May settlement was 0.6 per cent lower at $84.88 a barrel at 1:37 p.m. in London.
• WTI for April delivery dipped 0.7 per cent to $80.71 a barrel.