Supply Concerns Drive Oil Prices Higher Than Ever

Tuesday’s tumultuous trading saw oil prices rise as concerns over limited fuel supply ahead of the winter season outweighed investor worries about declining demand in China, the world’s largest crude importer, and more hikes in U.S. and European interest rates.

By 0644 GMT, Brent crude had climbed 50 cents, or 0.5%, to $94.50 per barrel, while WTI crude had climbed 52 cents, or 0.6%, to $88.30. Early in the session, both contracts decreased by more than $1. According to data from the Department of Energy, the Strategic Petroleum Reserve (SPR) in the United States decreased by 8.4 million barrels to 434.1 million barrels.

Will Gasoline Be Even More Pricy?

U.S. President Joe Biden announced a plan to release 1 million barrels per day over six months from the SPR in March to combat the high gasoline costs in the US, which have led to inflation. Commercial oil supplies have decreased for five weeks, falling by about 200,000 barrels in the week leading up to September 9. At 4:30 p.m., an industry association called the American Petroleum Institute (API) will release its inventory report. Tuesday, 2030 EDT (2030 GMT). At 10:30 a.m., the U.S. Energy Information Administration (EIA) releases its report. EDT on Wednesday (1430 GMT).

The likelihood of the Western nuclear agreement with Iran being revived remained remote. On Monday, Germany voiced disappointment at Tehran’s rejection of European suggestions to resurrect the 2015 accord. The U.S. In the immediate future, a deal would be improbable, according to Secretary of State Antony Blinken. Tuesday’s advances in oil prices were restrained by resurgent worries about declining global fuel consumption as China, the second-largest oil consumer in the world, continues to enact COVID-19 regulations. According to official data, fewer travels were made over China’s three-day Mid-Autumn Festival break, and tourist earnings also decreased due to COVID-19’s stringent regulations.