See also: Gas-to-Oil Switching: A Trend to Shape Winter Crude Prices
At least one technical indicator signaled oil was poised for a pullback after a sizzling start to the week. West Texas Intermediate’s 14-day Relative Strength Index jumped above 70 on Monday, a level that signals crude is overbought.
Oil rallied to the highest since 2014 this week as an energy crunch from Europe to Asia raised the prospect of greater demand for crude and oil products ahead of winter, while OPEC+ said it would restore only a relatively modest amount of supply to the market in November as planned. Saudi Aramco said the gas crisis has already boosted consumption, while the Financial Times reported the U.S. is considering the release of emergency oil reserves.
“High energy prices are mostly centered around supply-side issues and they do not look like they will persist beyond winter,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore. “Where prices are at right now, I think they look reasonable, but I still have my doubts about $100 oil.”
U.S. gasoline stockpiles rose by around 3.3 million barrels last week, while distillate inventories slipped by 396,000 barrels, according to data from the Energy Information Administration. Crude supplies at the key storage hub in Cushing, Oklahoma, expanded for a second week.
Exports from Russia’s Gazprom PJSC to Europe in the first nine months of the year were close to all-time highs, according to the company. If that pace is sustained for the rest of 2021, it would be a record year, Putin said at a televised meeting on Wednesday.
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