Oil offsets its losses, buoyed by demand expectations in light of high gas prices

Oil prices rose Thursday, recovering from previous losses, on expectations that rising natural gas prices as winter approaches could lead to a shift to oil to meet the demand for heating fuel.

Brent crude futures rose 28 cents, or 0.3%, to $ 83.46 a barrel in morning, after falling 0.3% on Wednesday. US West Texas crude oil contracts also rose 22 cents, or 0.3%, to $ 80.66 a barrel, after falling 0.3% the previous day.

“Investors are betting that rising gas prices will encourage power plants to switch to oil as the winter demand season approaches,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

Prices were also supported by concerns over limited supply, after the Energy Information Administration said yesterday Wednesday that crude oil production in the US, the world’s largest producer, will decline more than expected in 2021 before. resume an increase in 2022..

The American Petroleum Institute said on Wednesday that U.S. crude oil inventories rose 5.2 million barrels in the week ending October 8, according to market sources who reviewed the institute’s data.

Sources said the American Petroleum Institute also reported that gasoline stocks fell by 4.6 million barrels and distillate stocks fell by 2.7 million barrels.

Analysts in a survey conducted by “Reuters” predicted an increase in crude oil inventories of 700,000 barrels.

On the other hand, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast on global oil demand growth for 2021, in its latest monthly report on Wednesday, while maintaining its forecast for 2022. However, the group said that higher natural gas prices could increase the demand for petroleum, petroleum products.

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