Oil prices fell on Wednesday on fears of slowing crude demand growth, weighing on recent gains that pushed prices to multi-year highs in recent sessions.
Analysts noted that some traders likely took profits in US crude after West Texas Intermediate (WTI) futures hit their highest levels since October 2014 over the past three sessions.
Brent crude futures fell 24 cents, or 0.3%, to settle at $83.18 a barrel, while US West Texas Intermediate crude fell 20 cents, or 0.3%, to $80.44.
Prices came under pressure early on when China, the world’s largest importer of crude, released data showing September imports down 15% from a year earlier.
The market is awaiting US oil inventories data, which analysts expect to show 0.7 million barrels in crude oil inventories. [EIA/S] [API/S]
Data from the American Petroleum Institute, an industry group, is due at 4:30 pm ET (2030 GMT) on Wednesday and from the US Energy Information Administration on Thursday. The data was delayed a day after the Columbus holiday on Monday.
Coal and natural gas shortages in China, Europe, and India have pushed up prices for fuels burned to generate electricity. Oil products are used as a substitute.
The European Commission has outlined measures the EU could use to combat rising energy prices, and said it would explore inter-state gas purchases.
The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for global oil demand growth for 2021 while maintaining its outlook for 2022.
But OPEC said higher natural gas prices could boost demand for oil products as end users shift.
Jim Ritterbusch, OPEC President, said: “Today’s OPEC monthly report appears to offer something for both bulls and bears, as the agency unexpectedly lowered their forecast for global oil demand… for this year while revising estimates of non-OPEC supply growth downward. “. Ritterbusch & Company in Galena, Illinois.
Global markets should not expect more Iranian oil in the near future. The United States said it was ready to consider “all options” if Iran was not ready to return to the 2015 nuclear deal.
In Russia, Russian President Vladimir Putin said oil prices could reach $100 a barrel and indicated that Moscow was ready to provide more natural gas to Europe if requested.
Energy markets focus on how the supply crunch will affect oil demand, especially in China, the world’s second largest economy.
“These are worrisome times for China. A severe energy crisis is sweeping the country,” said Stephen Brennock of PVM Brokerage.
In India, which is experiencing its worst power shortage since 2016 due to severe coal shortages, fuel consumption saw a creep higher in September as economic activity picked up. India is the third largest oil importer in the world.
In the United States, the government has projected that consumers will spend more to heat their homes this winter than last year, mostly due to higher energy prices.
The White House has been talking with US oil and gas producers about helping cut rising fuel costs.
US gasoline and diesel futures closed at their highest levels since October 2014 on Wednesday.
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