Oil prices recorded a rise today, Tuesday, supported by the decline in inventories, and the global benchmark Brent crude contracts rose 1.18%, to $83.05 per barrel, and the benchmark West Texas Intermediate crude contracts increased by 1.18%. The US dollar was 0.8%, to $81.6. This is despite concerns about demand after a spike in COVID-19 infections in Europe.
“We have very low levels of inventories, and if the very cold winter comes and the slowdown in OPEC continues to increase supply, this could raise oil prices,” said Tony Noonan, senior risk manager at Mitsubishi Corp.
However, fears of a collapse in demand due to the Covid-19 pandemic affected prices as well.
Europe has once again become the epicenter of the COVID-19 pandemic, prompting some governments to consider reimposing a nationwide lockdown, at a time when China is battling the largest delta outbreak.
The Organization of the Petroleum Exporting Countries (OPEC) last week lowered its forecast for global oil demand for the fourth quarter by 330,000 barrels per day from its estimate last month, while high energy prices impede the economic recovery from the Covid-19 pandemic.
Fears of a drop in demand came amid expectations of an increase in supply.
Last week, US energy companies added oil and natural gas rigs for the third week in a row, driven by a 65% increase in US crude prices since the beginning of the year.
US shale oil production is expected in December to reach pre-pandemic levels of 8.68 million barrels per day, according to Rystad Energy.
