NEW YORK, Oct 12 (Reuters) – Oil prices steadied after whipsawing in a volatile session on Tuesday, as traders weighed the effect that higher energy costs could have on the global economic recovery.
Brent crude fell 23 cents to settle at $83.42 a barrel, after trading from a high of $84.23 to a low of $82.72. On Monday, the global benchmark hit $84.60, its highest since October 2018.
U.S. West Texas Intermediate crude futures (WTI)
Brent has risen for five consecutive weeks, while WTI has notched seven straight weeks of gains. Both contracts have risen by more than 15% since the start of September.
Authorities from Beijing to Delhi scrambled to fill a yawning power supply gap on Tuesday, roiling global stock and bond markets on worries that rising energy costs will stoke inflation. read more
Power prices have surged to record highs in recent weeks, driven by shortages in Asia and Europe, with an energy crisis in China expected to last through year end, crimping growth in the world’s second-largest economy and top exporter. read more
In London and southeast England, a tenth of fuel stations remained dry panic fuel buying last month, the Petrol Retailers Association said. read more
“People are starting to realize that the risk of higher energy prices could derail growth,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “Is energy demand a good thing or a bad thing?”
Persistent supply chain disruptions and inflation pressures are constraining the global economic recovery from the pandemic, the International Monetary Fund said as it cut growth outlooks for the United States and other industrial powers. read more
In its World Economic Outlook, the IMF trimmed its 2021 global growth forecast to 5.9% from the 6.0% forecast it made in July. It left a 2022 global growth forecast unchanged at 4.9%.
Even as demand grows, the Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+, are sticking to plans to restore output gradually rather than quickly.
The price of Brent has surged by more than 60% this year. As well as OPEC+ supply restraint, the rally has been spurred by record European gas prices, which have encouraged a switch to oil for power generation in some places. read more
European gas at the Dutch TTF hub stood at a crude oil equivalent of about $169 a barrel, based on the relative value of the same amount of energy from each source, Reuters calculations based on Eikon data showed.
Reporting by Stephanie Kelly in New York; additional reporting by Alex Lawler and Aaron Sheldrick; Editing by Marguerita Choy and Jason Neely
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