Oil extended an upswing as OPEC+ supply cuts tightened the market, with Saudi Energy Minister Abdulaziz bin Salman due to address a conference on the kingdom’s crude policy and view on net zero.

Global benchmark Brent advanced above $94 a barrel after a three-week run of gains that boosted prices by 11%. With Saudi Arabia and Russia prolonging supply curbs to the year-end, Abdulaziz is set to be among keynote speakers at the World Petroleum Congress in Calgary later on Monday.

Crude in London is nearly 10% higher year-to-date as the OPEC+ linchpins curb production and the demand outlook brightens, with the US potentially avoiding recession just as refiners in China go all-out. Against that backdrop, crude stockpiles have dropped, while speculators boosted net-bullish wagers on Brent and US benchmark West Texas Intermediate to a combined 15-month high.

Oil’s surge will fan inflationary pressures around the globe just as central bankers, including those at the US Federal Reserve, try to determine whether they have already done enough to beat back the pace of price gains by hiking interest rates. It’ll be an important week for monetary policy, with decisions due from the Fed and the Bank of England, among others.

“Focus is likely to turn to the Fed meeting this week, but growing supply tightness and eroding inventories likely to continue underpinning bullish sentiment.’,”said Vandana Hari, founder of consultancy Vanda Insights.

In the physical market, refined products like diesel are increasingly showing warning signs, with the world’s refineries proving powerless to make enough of the industrial fuel. Prices have far outstripped those for crude.

Widely-watched crude timespreads are also signaling tightness, with the gap between Brent’s two nearest contracts at 90 cents a barrel in backwardation. That’s the widest since November and reflects scarce near-term supplies.

Bloomberg