- Brent highest since 2018, WTI highest since July
- As OPEC reopens the taps, African giants struggle to pump more
- China faces power shortages, hits factory output
LONDON, Sept. 28 (Reuters) – Oil markets climbed for a sixth day on Tuesday, boosted by tighter supply and a firm demand outlook, but power shortages in China that hit factory output tempered the reprise.
Brent crude had gained 12 cents, or 0.1%, to $ 79.65 a barrel at 1358 GMT, after hitting its highest level since October 2018 at $ 80.75. Brent gained 1.8% on Monday.
U.S. West Texas Intermediate (WTI) crude rose 22 cents, or 0.3%, to $ 75.67 a barrel, after hitting a session high of $ 76.67, its highest since July. It jumped 2% the day before.
Hurricanes Ida and Nicholas, which swept through the Gulf of Mexico in the United States in August and September, damaged platforms, pipelines and processing centers, cutting off most offshore production for weeks. Read more
Also weighing on supply, Africa’s major oil exporters Nigeria and Angola will find it difficult to increase production up to quotas set by the Organization of the Petroleum Exporting Countries (OPEC) at least until next year due to underinvestment and maintenance issues, sources from their respective oil companies said. . Read more
Their battle mirrors that of several other members of the OPEC + producer group who have curbed production to support prices but are unable to increase production to meet the recovery in demand. Read more
“Oil markets are accelerating as a persistent supply deficit reduces inventory coverage to the lowest level in decades,” Barclays said in a note.
The bank raised its 2022 Brent and WTI price forecasts to £ 77 and $ 74 a barrel, respectively.
Morgan Stanley sees Brent trading at $ 77.5 a barrel in the third quarter in a base scenario and $ 85 in a bullish scenario.
Prices are facing headwinds, however, due to a shortage of electricity at the world’s largest energy consumer.
“The recent rationing of electricity to industries in China to reduce emissions could weigh on economic activity, potentially offsetting the tailwind from the additional use of diesel in power generation,” Barclays said. Read more
Demand for oil will rise sharply over the next few years as economies recover from the pandemic, OPEC predicted on Tuesday, adding that the world must continue to invest in production to avoid a crisis despite an energy transition. Read more
Additional reporting by Yuka Obayashi in Tokyo; Editing by Jason Neely and Edmund Blair
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