Oil falls on faltering economic growth fears to hit demand
- China Coal Prices Hit Record
- IMF slashes growth prospects for major economies
- China: September crude imports fall 15% year-on-year
MELBOURNE, Oct. 13 (Reuters) – Oil prices edged down on Wednesday amid fears that growth in oil demand could fall as major economies suffer from inflation and supply chain problems, although the Soaring prices for power generation fuels such as coal and natural gas limit losses.
Brent crude futures fell 11 cents, or 0.1%, to $ 83.31 a barrel at 0502 GMT, extending a loss of 23 cents on Tuesday.
US West Texas Intermediate (WTI) crude futures fell 11 cents to $ 80.53 a barrel after gaining 12 cents on Tuesday.
Both contracts cut losses after falling 70 cents earlier when China, the world’s largest importer of crude, released data showing September’s imports fell 15% from a year earlier . Read more
However, China, along with Europe and India, remain mired in coal and natural gas shortages that have driven up prices for power generation fuels.
“The data is retrospective, but the energy shortages in China are very real in real time,” said Jeffrey Halley, senior analyst at OANDA.
“It will take a significant drop in the prices of natural gas and coal to cap oil prices.”
Thermal coal prices in China hit record highs on Wednesday as recent flooding in the main coal-producing province of Shanxi exacerbated the supply shortage, as did Beijing’s new efforts to liberalize electricity prices. stimulated demand from electricity producers. Read more
Still, the International Monetary Fund slashed its growth outlook for the United States and other major economies on Tuesday, fearing that supply chain disruptions and cost pressures would hamper the global economic recovery from the pandemic. coronavirus. Read more
A strong US dollar, trading near a year-ago high, has also weighed on oil prices, as it makes oil more expensive for those holding other currencies. Read more
However, oil watchers still wonder whether soaring gas and coal prices will lead to increased demand for petroleum products for power generation.
“High gas and thermal coal prices are increasingly expected to be likely to stimulate demand for alternative fuels such as diesel and fuel oil,” analysts from ANZ Research said in a note. .
The market is also awaiting data on US oil inventories, delayed by a day after the Columbus Day holiday on Monday.
Analysts polled by Reuters estimate that US crude inventories rose 100,000 barrels in the week to October 8, which would mark a third straight week of increases.
They also estimated that gasoline inventories rose by about 100,000 barrels, while distillate inventories, which include diesel, heating oil and jet fuel, fell by about 1 million barrels.
Data from the American Petroleum Institute, an industry group, is due Wednesday at 4:30 p.m. EDT (8:30 p.m. GMT) and from the US Energy Information Administration on Thursday.
Reporting by Sonali Paul in Melbourne and Florence Tan in Singapore; Edited by Christian Schmollinger
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