NEW YORK: Oil prices edged lower on Wednesday on concerns of slowing crude demand, which ate away recent gains that had driven prices to multi-year highs in recent sessions.
Analysts noted that some traders took profits in US crude after West Texas Intermediate (WTI) futures hit their highest level since October 2014 during the past three sessions.
Brent futures fell 24 cents, or 0.3%, to $83.18 a barrel, while US West Texas Intermediate (WTI) crude fell 20 cents, or 0.3%, to $80.44.
Prices quickly came under pressure when China, the world’s biggest crude importer, released data showing September imports falling 15% from a year earlier.
The market is awaiting US oil inventory data, which analysts expect to show a 0.7 million barrel build in crude stocks. [EIA/S] [API/S]
Data from the American Petroleum Institute, an industry group, is due Wednesday at 4:30 p.m. EDT (2030 GMT) and Thursday from the U.S. Energy Information Administration. The data was delayed by a day after the Columbus Day holiday on Monday.
Shortages of coal and natural gas in China, Europe and India have driven up the prices of the fuel burned for electricity generation. Oil products are being used as an alternative.
The European Commission outlined measures the EU could use to tackle rising energy prices, and said it would explore joint gas purchases between countries.
The Organization of the Petroleum Exporting Countries (OPEC) has cut world oil demand growth forecast for 2021 while maintaining its 2022 outlook.
But OPEC said a rise in natural gas prices could boost demand for oil products as end users switch.
“Today’s monthly OPEC report offered something for both bulls and bears, with the agency unexpectedly lowering its global oil demand forecast … Associates in Galena, Illinois.
Global markets should not expect more oil from Iran in the near future. The US said it was ready to consider “all options” if Iran was unwilling to return to the 2015 nuclear deal.
In Russia, President Vladimir Putin said oil prices could reach $100 a barrel and noted Moscow is ready to provide more natural gas to Europe if requested.
Energy markets are focused on how supply constraints will affect oil demand, especially in China, the world’s second-largest economy.
“These are troubled times for China. A serious energy crisis is gripping the country,” said Stephen Brennock of broker PVM.
In India, which is facing the worst power shortage due to coal shortage since 2016, September saw a rise in fuel consumption as economic activity picked up. India is the third largest oil importer in the world.
In the United States, the government has forecast that consumers will spend more to heat their homes this winter than last year due to rising energy prices.
The White House is talking with US oil and gas producers about helping them reduce rising fuel costs.
US petrol and diesel futures on Wednesday closed at their highest level since October 2014.
(Additional reporting by Sonali Paul in Melbourne and Florence Tan in Singapore and Noah Browning in London; Editing by Amelia Sithole-Mataris, Barbara Lewis, Louise Heavens, Jan Harvey, Jane Merriman and David Gregorio)
Disclaimer: This post has been self-published from the agency feed without modification and has not been reviewed by an editor
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