Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Copper Tip Energy Services
Hazloc Heaters
Copper Tip Energy
Hazloc Heaters


Oil Edges up on Tighter Supplies, Heating Oil Prices


These translations are done via Google Translate

Summary

  • China draws on record inventories amid high prices – data
  • Bouyant price of heating oil lifts crude prices – analyst
  • China economic sentiment, US rate hike risk continues to weigh

LONDON, Aug 21 (Reuters) – Oil prices edged higher on Monday as tighter supply reflected in fewer exports from Saudi Arabia and Russia and high heating oil prices outweighed concerns about global demand growth amid high interest rates.

Brent crude climbed 76 cents to $85.56 a barrel by 1047 GMT, while U.S. West Texas Intermediate crude was at $82.1 a barrel, up 85 cents.

The September WTI contract expires on Tuesday and the more active October contract gained 78 cents to $81.44 a barrel.

Both front-month benchmark prices snapped a 7-week winning streak last week to post a weekly loss of 2% on concerns that China’s sluggish economic growth will adversely impact oil demand and the possibility that the U.S. interest rate hike cycle is not over yet.

“We still see a tight oil balance for the remainder of the year, which suggests that prices still have some room to run higher,” said Warren Patterson, ING’s head of commodities research.

As well, “the dollar seems to be taking somewhat of a breather, which would be providing some support,” he said.

ROO.AI Oil and Gas Field Service Software
GLJ

A weaker dollar makes oil purchases less expensive for holders of other currencies, sparking demand.

Also supporting crude is the buoyant price of heating oil, which is in focus as the northern hemisphere approaches darker months, said John Evans of oil broker PVM.

However, what is like trying to hit a “flying insect with a bazooka” is determining whether the current bullish nature of heating oil and the like is enough to rally the oil complex or just hold it in the face of broader macroeconomic concerns, he said.

Despite its economic woes, China is drawing on record inventories amassed earlier this year as refiners scale back purchases after supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, drove global prices above $80 a barrel.

Still, in July, Saudi Arabia’s shipments to China fell 31% from June while Russia, with its discounted crude, remained the Asian giant’s largest supplier, Chinese customs data showed.

“Unless there is a recession and demand slows or drops, OPEC+ is in control, said Stefano Grasso, a senior portfolio manager at 8VantEdge in Singapore.

Reporting by Natalie Grover in London, Florence Tan in Singapore and Mohi Narayan in New Delhi; editing by Shri Navaratnam and Tom Hogue



Share This:



More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE