Oil rose in tandem with equity markets while traders turned their attention to an upcoming OPEC+ meeting that may yield supply increases.
Investors are also focusing on demand after China ordered its state-owned companies to secure energy supplies for winter at all costs as the country struggles with a deepening power crisis.The order from Beijing is the latest sign that rising energy prices are becoming a political issues, after the White House Thursday said crude’s rally was a concern.
“Oil is being supported by the prospect of demand outstripping supply over the coming months,” said Fiona Cincotta, senior financial markets analyst at City Index. “The expectations of future demand are strong.”
JP Morgan Chase & Co. also warned that worsening natural gas crises in Asia and Europe will spur so many power generators to switch to petroleum-based fuels that Brent crude will reach $84 a barrel by the end of the year.
It is likely to add more upward pressure to already elevated coal and liquefied natural gas prices, as well as oil products including fuel oil, diesel and propane, which can be used for electricity generation or to power small generators. That’s bolstering the scrutiny on OPEC+’s next move when it meets Monday.
Meanwhile, the OPEC+ alliance, led by Saudi Arabia and Russia, will meet next week to review the next monthly increase. Part of the problem is that some OPEC members, like Angola and Nigeria, are struggling to revive production as they wrestle with operational disruptions and investment constraints
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