Oil steady as surging power fuel prices offset worries about crude demand
Oil prices were flat on Wednesday as surging fuel costs for power generation offset expectations for slower crude demand growth as major economies struggle with inflation and supply chain issues.
Brent futures settled 24 cents, or 0.3%, lower at $83.18 per barrel. U.S. West Texas Intermediate (WTI) crude dipped 20 cents, or 0.25%, to end the day at $80.44 per barrel.
On Tuesday, WTI closed at its highest since October 2014 for a third day in a row.
Prices came under pressure early when China, the world’s biggest crude importer, released data showing September imports fell 15% from a year earlier.
China, along with Europe and India, faces coal and natural gas shortages that have boosted prices for the fuels burned for electricity generation. Oil products are being used as a substitute.
The European Commission outlined measures the European Union could use to combat surging energy prices, and said it would explore joint gas purchasing among countries.
The Organization of the Petroleum Exporting Countries (OPEC) trimmed its world oil demand growth forecast for 2021 while maintaining its 2022 view.
But OPEC said surging natural gas prices could boost demand for oil products as end users switch.
$100 oil is ‘quite possible,’ Russia’s Putin says
Russian President Vladimir Putin said Wednesday that oil prices could well reach $100 per barrel as demand for all energy commodities grows.
Energy prices have soared across the board as economies reopen after months of pandemic-induced lockdowns and supply remains tight. West Texas Intermediate crude futures, the U.S. oil benchmark, crossed $80 per barrel last week for the first time since Nov. 2014.
But Putin, leader of one of the world’s biggest oil-producing nations, believes it can go even higher. When asked if WTI could reach $100 per barrel, he said: “That is quite possible.”
Speaking to CNBC’s Hadley Gamble at an event in Moscow, Putin, however, said that Russia and other oil-producing countries are doing their utmost to bring some stabilization to the market.
“Russia and our partners and OPEC + group, I would say we are doing everything possible to make sure the oil market stabilizes. We are trying not to allow any shock peaks in prices. We certainly do not want to have that — it is not in our interests,” he said, according to a translation.
Putin says Russia is not using gas as a weapon, claims U.S. added to energy crisis
Russian President Vladimir Putin said Wednesday that his country is not using energy as a weapon against Europe and that Russia stands ready to help the region as its energy crisis continues.
“We are not using any weapons,” Putin told CNBC in Moscow on Wednesday, according to a translation. “Even during the hardest parts of the Cold War Russia regularly has fulfilled its contractual obligations and supplies gas to Europe,” he said.
Putin laid the blame for Europe’s gas shortages at its own door, as well as blaming a lack of renewable energy generation this summer and reduced supplies from other partners, including the U.S.
Reference: CNBC
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