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Oil prices mixed on tight stocks, demand worries


The chimneys of the Total Grandpuits oil refinery are seen just after sunset, southeast of Paris, France, March 1, 2021. REUTERS / Christian Hartmann / File Photo

  • Trafigura CEO Weir sees “very, very tight” oil market
  • Oil price rally should ease as supply rebounds, IEA says
  • COVID lockdown fears in Europe, increasing cases in China
  • U.S. crude inventories rose 1.4 million barrels last week – survey
  • Coming soon: API US oil inventories data on Tuesday

Nov. 16 (Reuters) – Oil prices were little changed on Tuesday as prospects for tight inventories around the world were offset by expectations of an increase in production in the coming months and concerns about the increase of coronavirus cases in Europe.

Brent crude rose 2 cents, or 0.1%, to $ 82.04 a barrel, at 4:10 p.m. GMT, while U.S. West Texas Intermediate (WTI) crude fell 37 cents, or 0.4 %, at $ 80.50 per barrel.

“The oil market will remain tight in the short term, which should support prices,” said Carsten Fritsch, analyst at Commerzbank.

Trafigura CEO Jeremy Weir said the tightening in global oil markets was due to demand returning to pre-pandemic levels. Read more

Oil production from the Permian, located in Texas and New Mexico, is expected to hit a record 4.953 million barrels per day (bpd) in December as production has returned with surging economic demand. Read more

U.S. crude oil inventories are expected to have risen for a fourth straight week, with analysts in a Reuters poll forecasting construction of around 1.4 million barrels last week.

The first of two weekly supply reports, from industry group American Petroleum Institute, is due later Tuesday.

However, the International Energy Agency (IEA) said that the recovery in the oil market could ease, as high prices could be a strong incentive to increase production, especially in the United States. Read more

The IEA said it expects average Brent prices to be around $ 71.50 per barrel in 2021 and $ 79.40 in 2022.

OPEC Secretary General Mohammad Barkindo has said he expects a surplus in oil supply as early as December and that the market will remain in surplus next year. Read more

The Organization of the Petroleum Exporting Countries last week cut its forecast for world oil demand for the fourth quarter by 330,000 bpd from last month’s forecast as high energy prices hampered economic recovery after the COVID-19 pandemic. Read more

Concerns about the destruction of demand have also weighed in as Europe once again became the epicenter of the COVID-19 pandemic, prompting some governments to consider reimposing lockdowns as China battles the spread of its more large epidemic caused by the Delta variant. Read more

The Biden administration plans to tap US emergency stocks to curb rising oil prices. However, the acting head of the US Energy Information Administration said that a release of oil from the United States Strategic Petroleum Reserve (SPR) would likely only have a short-lived impact on oil markets.

“The market looks fundamentally strong with strong physical markets, but with a lack of shorts in the market and fears of SPR, the market simply cannot recover,” said Scott Shelton, energy specialist at United. ICAP.

The dollar (.DXY) hit a 16-month high against a basket of currencies after strong US retail sales data. A stronger dollar makes oil more expensive for buyers using other currencies. Read more

The German energy regulator has also suspended the approval process for Nord Stream 2, a major new gas pipeline bringing Russian natural gas to Europe, pushing up regional prices. Read more

Higher fuel prices tend to stimulate demand for oil as utilities turn to burning crude rather than natural gas.

Reporting by Bozorgmehr Sharafedin in London, additional reporting by Naveen Thukral and Roslan Khasawneh in Singapore; Additional reporting by Florence Tan; Editing by Marguerita Choy and Jonathan Oatis

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