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Oil stays close to multi-year highs as energy crisis continues

Crude oil storage tanks are seen in an aerial photograph at the Cushing Oil Hub in Cushing, Oklahoma, USA, April 21, 2020. REUTERS / Drone Base

LONDON, Oct. 19 (Reuters) – Oil edged down on Tuesday but remained near multi-year highs as the energy supply crisis continued around the world, while lower temperatures in China rekindled concerns about whether the world’s largest energy consumer can meet home heating needs.

The benchmark Brent crude index was down 3 cents, or less than 0.1%, to $ 84.30 a barrel at 1351 GMT after rising nearly 80 cents earlier in the session.

US West Texas Intermediate (WTI) futures fell 2 cents, or less than 0.1%, to $ 82.42, after rising more than $ 1 during the session.

Brent is still up almost 7% this month and WTI is still up almost 10%.

“In a bull market, it’s usually Brent that leads the way, but this time around (US) domestic issues give WTI additional support,” said Tamas Varga, oil analyst at PVM Oil Associates, company. London brokerage.

“The recent hurricane season has been so disruptive that (American) producers have not fully recovered from the damage caused by (Hurricane) Ida.”

With temperatures dropping as northern hemisphere winter approaches and demand for heating increases, prices for oil, coal and natural gas are expected to remain high, traders and analysts said. .

Colder weather has already started to take hold of China, with near-freezing temperatures forecast for northern areas, according to

China coal futures rose 7.8% on Tuesday, while riskier assets such as stocks also rose.

Rising prices for coal and natural gas in Asia are expected to lead some end users to turn to lower-cost oil as an alternative.

While it is still uncertain how long the imbalance will affect the oil market, oil traders appear convinced that a high price winter is coming, said Louise Dickson, analyst at Rystad Energy.

However, the electricity crisis that is pushing up prices is also hurting China’s economic growth, which has fallen to its lowest level in a year, official data showed on Monday. Read more

China’s daily crude oil processing rate also fell last month, falling to its lowest since May of last year. Read more

Helping to keep prices under control, US oil production is expected to increase. Production in the world’s largest oil producer in the largest shale formation is expected to increase further next month, the Energy Information Administration said.

Reporting by Bozorgmehr Sharafedin Additional reporting by Aaron Sheldrick in Tokyo Editing by David Goodman

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