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By Laura Sanicola
NEW YORK (Reuters) – Oil costs rose on Monday, shaking up expectations of weaker demand for source considerations as winter approaches.
Brent futures stood at $1. 16, or 1. 3%, at $94. 00 per barrel. West Texas Intermediate crude gained cents, or 1. 1%, to $87. 78.
U. S. Emergency Oil Inventoriesfell from 8. 4 million barrels to 434. 1 million barrels in the week ending Sept. 9, their lowest point since October 1984, according to data released Monday by the U. S. Department of Energy. U. S. (DOE).
U. S. President Joe Biden in March laid out a plan to lose 1 million barrels per day for six months of the strategic oil reserve to fight high U. S. fuel prices. In the US, they have contributed to the rise in inflation.
Biden’s management is assessing the need for new SPR launches after the existing program ends in October, Energy Secretary Jennifer Granholm told Reuters last week.
Global oil is expected to tighten further when the European Union’s embargo on Russian oil comes into force on December 5.
The G7 will set a cap on Russian oil costs to restrict the country’s oil export revenues, seeking to punish Moscow for the invasion of Ukraine, while taking steps to ensure oil can still reach emerging countries.
However, the U. S. Treasury The U. S. has warned that the cap could further increase U. S. oil and gas costs. U. S. this winter. [nL1N30I0BQ
The EU’s European Executive Commission is due to unveil a package of measures on Wednesday for electricity corporations facing a liquidity crisis.
France, Britain and Germany said on Saturday they had “serious doubts” about Iran’s intentions to revive a nuclear deal. If the 2015 deal is not revived, Iranian oil would not enter the market and would remain adjusted to global sources.
In more pessimistic news for markets, China’s oil demand could contract for the first time in two decades this year, as Beijing’s COVID-0 policy helps keep other people at home during the holidays and reduces fuel consumption.
“The continued presence of headwinds due to the new viral restrictions imposed by China and the continued moderation of global economic activity would possibly still generate some reservations about a more sustained increase,” said Jun Rong Yeap, market strategist at IG.
Domestic oil production in the United States is also expected to increase in the coming months. Oil production in the Permian Basin in Texas and New Mexico, the largest shale oil basin in the U. S. is expected to be oil-rich. ) to a record 5. 413 million bpd in October, the U. S. Energy Information Administration (EIA) said. The U. S. Department of Homeland Security in its Productivity Report on Monday.
Meanwhile, the European Central Bank and the U. S. Federal Reserve. U. S. dollars are poised to raise interest rates further to combat inflation, which could hurt the U. S. currency and make dollar-denominated oil more expensive for investors.
“A strong dollar would serve as an inverse correlation with dollar commodity prices and will most likely reduce upward gains in the energy market,” said Bob Yawger, director of energy futures at Mizuho.
(Laura Sanicola reports in New YorkAdditional reports via Noah Browning, Florence Tan and Jeslyn LerhMontage via Deepa Babington and Matthew Lewis)