LONDON, Nov. 16 (Reuters) – Oil prices rose on Tuesday, supported by the prospect of tight stocks around the world, although gains were limited by forecasts of an increase in global production in the months to coming and concerns about the increase in coronavirus cases in Europe.
Brent crude was 52 cents, or 0.6%, up to $ 82.57 a barrel, at 11:10 a.m. GMT, and U.S. West Texas Intermediate (WTI) crude climbed 42 cents, or 0.5 %, at $ 81.30 per barrel.
“The oil market will remain tight in the short term, which should support prices,” Commerzbank analyst Carsten Fritsch said.
Trafigura CEO Jeremy Weir said the tightening in global oil markets was due to demand returning to pre-pandemic levels. Read more
âIt’s not artificially tight because of what OPEC is doing. The demand is there,â Weir said at the FT Commodities Asia summit.
However, the International Energy Agency (IEA) said that the recovery in the oil market could ease, as high prices could be a strong incentive to increase production, especially in the United States. Read more
The IEA said it expects average Brent prices to be around $ 71.50 per barrel in 2021 and $ 79.40 in 2022.
OPEC Secretary General Mohammad Barkindo also said on Tuesday that he expects an oil supply surplus as early as December and the market will remain in surplus next year. Read more
“The surplus starts already in December. These are signals that we have to be very, very careful about,” he said.
The Organization of the Petroleum Exporting Countries (OPEC) last week cut its forecast for world oil demand for the fourth quarter by 330,000 barrels per day (bpd) from last month’s forecast, as high oil prices energy have hampered economic recovery from the COVID-19 pandemic. Read more
Still, concerns about the destruction of demand due to the COVID-19 pandemic have loomed large.
Europe has once again become the epicenter of the COVID-19 pandemic, prompting some governments to consider reimposing lockdowns as China battles the spread of its largest outbreak caused by the Delta variant. Read more
Reporting by Bozorgmehr Sharafedin in London, additional reporting by Naveen Thukral and Roslan Khasawneh in Singapore; Additional reporting by Florence Tan; Editing by Kenneth Maxwell, Kirsten Donovan
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