WTI and Brent reach a mixed agreement | Rigzone

New York oil futures rose for the fourth day in a row in choppy trading as investors assessed how a global energy crisis will affect demand this winter.

Futures in New York rose 0.2% on Tuesday. The shortage of natural gas and coal before winter in the northern hemisphere has caused the switch of fuels such as diesel and fuel oil in the electricity sector. Meanwhile, rising food and fuel costs were one reason the International Monetary Fund cited in expressing concern about the loss of momentum in the global economic recovery.

“We don’t have a playbook for what happens when natural gas prices in Europe hit the equivalent of $ 250 a barrel in crude oil,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. “The market is trying to calibrate this new energy situation.”

Tuesday’s volatility comes as oil prices stabilize in the range of $ 80 a barrel. The precaution of the Organization of the Petroleum Exporting Countries and its allies to restore supplies has raised prices along with the fuel switch. UBS Group AG raised its estimates for oil in both New York and London due to increased demand from the energy sector and the revival of jet fuel consumption in the US.

However, the IMF warned that threats to growth have increased, pointing to the delta variant, strained supply chains, accelerating inflation and rising food and fuel costs.

“There is real harm potentially lurking from supply chain issues,” said John Kilduff, Partner at Again Capital LLC. “It is a real negative potential for the global economy.”

Prices:

  • West Texas Intermediate crude for November delivery rose 12 cents to settle at $ 80.64 a barrel in New York.
  • Brent for the December settlement fell 23 cents to settle at $ 83.42 a barrel.

Demand for fuel oil is increasing in parts of Asia as high natural gas prices cause the shift to one of the most polluting forms of energy, according to TotalEnergies SE.

“What’s happening with gas may be of concern to some Asian countries with emerging economies,” TotalEnergies CEO Patrick Pouyanne said Tuesday during the Evolen conference in Paris. “Some Asian countries are currently turning to fuel oil, which may have an impact on the oil market.”

Still, the pace of rising oil, combined with rising prices for other energy commodities and metals, is driving inflation and threatening to hit economies rebounding from the pandemic recession. Industries in Europe are forced to lock in or shut down their operations. That, in turn, could affect demand for oil.

(With the help of Jack Wittels and Saket Sundria.)

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