Oil prices offset earlier losses caused by worries about energy demand in China – .

Oil drops ahead of OPEC + supply policy meeting – .

Crude oil storage tanks are seen in an aerial photograph at the Cushing Oil Hub in Cushing, Oklahoma, USA, April 21, 2020. REUTERS / Drone Base

TOKYO, Oct. 19 (Reuters) – Oil prices rose on Tuesday, recouping earlier losses, as lower temperatures in China, the world’s largest energy consumer, rekindled concerns about its ability to respond to the demand for heating in a context of shortage of electricity and coal.

Brent crude rose 24 cents, or 0.3%, to $ 84.57 a barrel at 5:41 a.m. GMT after falling 0.6% on Monday. The contract is still up almost 7% this month.

US West Texas Intermediate futures gained 35 cents, or 0.4%, to $ 82.79 a barrel, after rising 0.2% in the previous session and nearly 10% this this month.

Brent fell on Monday after China released growth figures that disappointed the market, but with temperatures dropping as winter approaches in the northern hemisphere and demand for heating increased, oil, coal and natural gas prices are expected to remain high, traders and analysts said.

Colder weather has already started to take hold of China, with a forecast of near-freezing temperature in northern areas, according to AccuWeather.com.

“The tightness of the energy markets means that supply issues remain widespread and commodity prices remain strong,” said a Singapore-based energy derivatives trader.

China coal futures rose 7.8% on Tuesday, while riskier assets like stocks were also higher. Rising prices for coal and natural gas in Asia are expected to lead some end users to turn to lower-cost oil as an alternative.

However, the electricity crisis that is pushing up prices is also hurting China’s economic growth, which has fallen to its lowest in a year, official data showed Monday. Read more

China’s daily crude oil processing rate also fell last month to its lowest level since May of last year. Read more

Helping to keep prices under control, US oil production is expected to increase. Production from the largest shale formation in the United States, the world’s largest oil producer, is expected to increase further next month, according to an official report. Read more

Reportage by Aaron Sheldrick; Edited by Kenneth Maxwell and Christian Schmollinger

Our Standards: The Thomson Reuters Trust Principles.


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