Reuters, New York, October 19-Crude oil futures rose on Tuesday and are close to multi-year highs. Global energy supply continues to be tight, and the temperature drop in China has reignited concerns about China’s ability to meet heating needs amid coal power shortages.
Brent crude oil futures rose by US$0.75 to settle at US$85.08 per barrel. US crude oil (WTI) futures rose 0.52 US dollars to settle at US$82.96 per barrel.
In the past two months, prices have been climbing. Since the beginning of September, Brent crude oil prices have risen by about 19%, and US crude oil prices have risen by about 21%.
“The balance of supply and demand shows that the market is experiencing a shortage of supply, which is leading to a significant reduction in inventories and driving up prices,” said Louise Dickson, senior oil market analyst at Rystad Energy. “This tight market situation is expected to continue until 2022. Part of the time, in the fourth quarter of next year, crude oil supply will only catch up with demand.”
Traders and analysts said that as the northern hemisphere is about to enter winter, the temperature drops and heating demand rises, oil, coal, and natural gas prices are expected to remain high.
According to AccuWeather.com, temperatures across China have begun to cool, and the temperature in the northern region is expected to drop to near freezing.
Rising coal and natural gas prices in Asia are expected to cause some end users to switch to lower-cost oil as a heating fuel alternative.
Investors are waiting for the US crude oil and refined oil inventory data to be released later on Tuesday. Reuters’ preliminary investigation on Monday showed that US crude oil inventories may increase last week, while distillate and gasoline inventories are expected to decline. (over)
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