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Sunday, October 24, 2021

Oil Down as Global Energy Crunch Begins to Bite

Oil Down as Global Energy Crunch Begins to Bite
© Reuters.

By Gina Lee

Investing.com – Oil was down Tuesday morning in Asia, falling for the first time in four days. The black liquid was taking a breather after weeks of gains fueled by a rebound in global demand, with the gains contributing to energy shortages in economies from Europe to Asia, according to some investors.

Brent oil futures edged down 0.12% to $83.55 by 10:56 PM ET (2:56 AM GMT) and WTI futures edged down 0.16% to $80.39. Both Brent and WI futures stayed above the $80 mark, however.

“There is still plenty of momentum behind the oil rally and the fundamentals remain extremely favorable,” OANDA senior market analyst Craig Erlam told Reuters.

“Will it be a surprise to see oil back in the triple digits later this year? Probably not.”

A global energy crunch that continues to span Asia, Europe, and the U.S. has pushed power prices up to records in recent weeks. Rising natural gas prices are also pushed power generators to replace it with crude oil. The switch could boost demand for crude oil by between 250,000 to 750,000 barrels per day, according to some estimates.

In China, the top oil importer, major industrial regions are seeing power shortages. However, thermal coal futures were on an uptick again on Tuesday, with prices gaining more than 10%. Qatar, the biggest producer of liquefied natural gas globally, admitted to its customers on Monday that it would be unable to boost production and lower energy prices.

“We are maxed out, as far as we have given all our customers their due quantities,” Qatar energy minister Saad al-Kaabi told Reuters.

“I am unhappy about gas prices being high.”

Investors now await U.S. crude oil data from the American Petroleum Institute, due later in the day.

Source: Investing.com

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