Oil edged higher as the effect of rapidly tightening supplies outweighed a weakening risk appetite in broader markets.

Oil settled near US$91 a barrel, reversing earlier losses that were spurred by investors wrestling with the possibility of a prolonged period of higher interest rates. Traders continue to see signs of supply scarcity as the premium for near-term U.S. oil barrels is hovering at the most expensive in over a year, indicating a market deficit.

“Crude looks well supported, with today’s initial declines being short-lived as the market rebounded around the highs from earlier this month,” said Craig Erlam, senior market analyst at Oanda. “We may still see more of a correction, but there’s no clear sign of sentiment turning bearish after such a strong rally over the summer.”

Oil has surged more than 25 per cent since the end of June, heading for its biggest quarterly gain since early 2022, on the back of supply curbs from OPEC+ leaders Saudi Arabia and Russia. The rally has rekindled talk of $100-a-barrel crude, but the gains lost momentum over the past week amid concerns about the macroeconomic backdrop.

Prices:

• WTI for November delivery rose 71 cents to settle at $90.39 a barrel in New York.
• Brent for November settlement advanced 67 cents to settle at $93.96 a barrel.