Title: Oil prices bounce back on tight inventories, demand worries limit gains.
Updated: Nov 17, 2021
11/16/2021 02:31AM GMT
Oil prices recovered from a weak start on Tuesday as concerns over tight inventories supported prices, although optimism was limited by demand fears following a surge in COVID-19 cases in Europe.
At 0712 GMT, Brent futures were up 96 cents, or 1.2%, at $83.01 a barrel, while US West Texas Intermediate (WTI) crude climbed 80 cents, or 1%, to $81.68 a barrel.
Russian crude sold in Asia fetched the highest spot premiums in 22 months for cargoes shipped in January, gaining for the fourth straight month as robust demand and firm refining margins supported prices, trade sources said on Tuesday. Still, concerns about a drop in demand due to the COVID-19 pandemic weighed on prices.
China is battling the spread of its largest outbreak of the COVID-19 pandemic, prompting some governments to consider reimposing curbs as China fights the spread of its largest outbreak of the delta variant.
The Organisation of Petroleum Exporting Countries (OPEC) last week lowered its forecast for global oil demand in the fourth quarter by 330,000 barrels per day (bpd) from last month's forecast as high energy prices hamper economic recovery from the COVID-19 pandemic.
Fears of a drop in demand are being met by an expected rise in supply.
Last week, US energy companies drilled more oil and natural gas wells for the third week in a row, helped by a 65% rise in US crude prices so far this year.
According to Rystad Energy, US shale oil production in December is expected to reach pre-pandemic levels of 8.68 million barrels per day.
Money managers increased their net long positions in US crude oil futures and options in the week to November 9, according to the US Commodity Futures Trading Commission (CFTC) on Monday.