Crude oil contracts did a pretty good job this week. A recent move by Saudi suppliers to raise their selling prices for Asian customers made new deliveries of the country’s flagship Arab Light grade costing $1.70/bbl more than the Oman/Dubai average price, compared to $1.50/bbl before the decision. Surely, that does not sound like much, but it is combined with an extension of the global exporting production cut agreement by the OPEC and its allies on the last weekend, now valid until the end of June to confirm producing countries' belief in tightness of the fuel market structure. Other factors like an unexpected decline in US oil and gasoline inventories only help to strengthen at least a temporarily persistent bullish phase on oil charts. As a result, Brent crude futures price for May (BRN) is approaching $85/bbl for the second time since the start of the year. All in all, benchmark prices may be ultimately kept range-bound, yet this range ceiling could be found at $2 or $3 higher levels. This may form a shaky construction for speculative transactions with oil contracts, yet providing a more solid base for more increase in the leading shares of the petroleum sector. Based on current price benefits, at least a situational growth may take place or could be more lasting for several stocks like Marathon Oil (MRO, +6% since the beginning of the week already), not to mention giant producers including Exxon Mobil (XOM, +5% so far in March) or BP (BP, +7% on ADR NYSE trading in this month).

The International Energy Agency (IEA) raised its view for oil demand growth by 110,000 barrels per day (bpd) on March 14, compared to its previous month's projections, citing Houthi attacks on Red Sea shipping. According to the IEA monthly report, global demand would be increased by 1.3 million bpd in 2024, while it initially foresaw 2024 demand growth of 860,000 bpd in June 2023. The news that the US government bought around 3.25 million barrels of oil for its strategic reserves may be added to arguments for capturing an upside momentum for a while. If oil contracts could close the current week at near 4-month highs, this would indicate the fuel demand continues to pick up. Fresh bets for the spring and summer driving season could also make refineries to work hard.