Oil Prices Rise on China Energy Demand Concerns
Oct 19, 2021
Oil prices increased on Tuesday as a global supply shortage of natural gas, power, and coal persisted, while dropping temperatures in China reignited concerns about the world's largest energy consumer's ability to fulfill domestic heating demand.
After dropping 0.6 percent on Monday, the Brent oil benchmark climbed 35 cents, or 0.4 percent, to $84.68 a barrel at 0827 GMT. This month, the contract is still up over 7%.
WTI futures in the United States rose 70 cents, or 0.9 percent, to $83.14, after rising 0.2 percent the previous day and almost 10% this month.
"Normally, Brent leads the way up in a bull market, but this time around, local concerns in the United States give extra support for WTI," said Tamas Varga, an oil analyst at London brokerage PVM Oil Associates.
"The recent storm season was so disruptive that (US) farmers are still recovering from the devastation inflicted by Hurricane Ida."
With temperatures dropping as the northern hemisphere winter approaches and heating demand rising, traders and experts predict that oil, coal, and natural gas prices will remain high.
According to AccuWeather.com, colder weather has already begun to grip China, with near-freezing temperatures expected for northern parts.
"Normally, Brent leads the way up in a bull market, but this time around, local concerns in the United States give extra support for WTI," said Tamas Varga, an oil analyst at London brokerage PVM Oil Associates.
"The recent storm season was so disruptive that (US) farmers are still recovering from the devastation inflicted by Hurricane Ida."
With temperatures dropping as the northern hemisphere winter approaches and heating demand rising, traders and experts predict that oil, coal, and natural gas prices will remain high.
According to AccuWeather.com, colder weather has already begun to grip China, with near-freezing temperatures expected for northern parts.
Oil supply in the United States is expected to increase, helping to keep prices under control. According to the Energy Information Administration, production in the world's largest shale deposit is anticipated to increase further next month.
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The energy transition is in full swing, with electric vehicles supplanting gas guzzlers, and solar panels and wind turbines replacing coal and oil as the world’s leading energy sources. Scientists have cautioned that limiting temperature rises to 1.5 degrees Celsius will necessitate a 45 percent reduction in global emissions by 2030 and a total reduction of zero by mid-century.
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