Pumpjack for oil in the Permian Basin region.
Spencer Platt | Getty Images
Oil prices rose on Thursday, reversing previous losses, amid expectations that high natural gas prices as winter approaches could lead to a switch to oil to meet heating demand needs.
Brent crude futures gained 28 cents, or 0.3%, to $ 83.46 a barrel at 1:07 a.m. GMT after falling 0.3% on Wednesday.
US West Texas Intermediate (WTI) crude futures rose 22 cents, or 0.3%, to $ 80.66 a barrel, after falling 0.3% the day before.
“Investors are betting that soaring gas prices will encourage power producers to switch to oil as the winter demand season approaches,” said Hiroyuki Kikukawa, chief research officer at Nissan Securities.
Prices were also supported by concerns over tight supply after the United States’ Energy Information Administration (EIA) on Wednesday said that crude oil production in the United States, the world’s largest producer, was was going to drop in 2021 more than expected, thinking it would rebound. in 2022.
“The current tightening of the crude market and the near-term outlook for increased seasonal demand has supported investor sentiment, offsetting a larger than expected increase in US crude inventories and weaker demand forecast by OPEC “Kikukawa said.
The American Petroleum Institute (API) said Wednesday evening that U.S. crude inventories rose 5.2 million barrels for the week ended Oct. 8, according to market sources who saw the API data.
API also reported that gasoline inventories fell by 4.6 million barrels and distillate inventories fell by 2.7 million barrels, the sources said.
Analysts in a Reuters poll expected crude inventories to rise by 700,000 barrels.
The Organization of the Petroleum Exporting Countries (OPEC) downgraded its forecast for global oil demand growth for 2021 in its last monthly report on Wednesday, while maintaining its 2022 vision.
However, the producer group said rising natural gas prices could boost demand for petroleum products as end users switch fuels.
The EIA will release its inventory report later Thursday at 11:00 a.m. EDT (3:00 p.m. GMT).