Still, government data Wednesday showed nationwide U.S. crude inventories fell for a seventh week, while those at a key hub in Europe remain below average levels for the time of year.
With stockpiles falling, the market’s structure has rallied strongly. Brent’s nearest December contract is almost $7 more expensive than the next year’s, the most since 2019. That’s a sign of traders growing increasingly positive on the outlook. A similar gauge of strength in the U.S. market is the strongest since 2013.
Traders have been weighing the impact of a tightening natural gas market on the broader energy complex over winter, with Goldman Sachs Group Inc. predicting a demand boost could help crude advance to $90 a barrel if conditions are colder than normal. The focus has led to cross-commodity flows across the oil and gas markets, some of which have been unwound in recent days, helping push crude higher.
“With coal and gas rallying higher it is definitely spilling over into oil both through association,” said Bjarne Schieldrop, chief commodities analyst at SEB AB. “But also explicitly with substitution of oil for gas as gas is two times the price of oil.”
Manufacturing data in the euro-area and the U.K. was lower than expected for September. The figures are often a bellwether for diesel consumption.
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