Oil Takes Breather After Latest Charge Amid Tight Market

  • Posted on October 26, 2021
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  • By FC Team
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TOKYO (Reuters) - Oil prices edged lower on Tuesday, taking a breather from a sustained rally driven by strong demand in the United States, the world's biggest consumer of oil and its products.Brent crude was down 20 cents or 0.2% at $85.79 a barrel by 0143 GMT, after gaining 0.5% on Monday. U.S. oil was down 21 cents or 0.3% at $83.55 a barrel, having finished unchanged the previous session after testing new highs.While China's red-hot power and coal markets have cooled somewhat after government intervention, energy prices remain elevated worldwide as temperatures fall with the onset of the northern winter."Forecasts for a colder November have energy traders bracing for a very tight market that will be met (with) unprecedented demand this winter," OANDA senior market analysts Edward Moya said in a note."This oil market will remain tight and that should mean a headline or two away from $90 oil," he added.Goldman Sachs (NYSE:GS) said Brent is likely to push above its year-end forecast of $90 a barrel. The bank estimated switching to oil from gas may add 1 million barrels per day (bpd) to oil demand.Gasoline and distillate consumption is back in line with five-year averages in the United States after more than a year of depressed demand.The market will be closely watching U.S. inventory levels this week. Crude oil stockpiles are forecast to have risen by 1.7 million barrels last week, according to a Reuters poll of analysts. Gasoline and distillate inventories were expected to fall, however.investing.com

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