Oil stabilized after a volatile session on Tuesday, pausing a rally that took prices to multi-year highs and raised fears that rising energy costs could derail the global economic recovery.
Brent crude fell 23 cents to $ 83.42 a barrel, after falling 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.
US West Texas Intermediate (WTI) crude futures contracts ended up 12 cents at $ 80.64 a barrel, after varying between $ 81.62 and $ 79.47.
Brent has risen for five straight weeks, while WTI has posted seven straight weeks of gains. Both contracts have increased by more than 15% since early September.
Beijing authorities in Delhi scrambled to fill a yawning electricity supply shortage on Tuesday, rocking global stock and bond markets over fears that rising energy costs could fuel inflation.
Electricity prices have reached record highs in recent weeks, due to shortages in Asia and Europe, with an energy crisis in China expected to last until the end of the year, hampering growth in the second world economy and leading exporter.
In London and the south-east of England, a tenth of gas stations continued to buy dry panic fuel last month, the Petrol Retailers Association said.
“People are starting to realize that the risk of rising energy prices could derail growth,” said Phil Flynn, analyst at Price Futures Group in Chicago. “Is the demand for energy a good thing or a bad thing? “
Persistent supply chain disruptions and inflationary pressures are hampering global economic recovery from the pandemic, the International Monetary Fund said as it slashed growth prospects for the United States and other industrial powers.
In its World Economic Outlook, the IMF reduced its global growth forecast for 2021 to 5.9% from the 6.0% forecast in July. He left a 2022 global growth forecast unchanged at 4.9%.
Even as demand increases, the Organization of the Petroleum Exporting Countries and allied producers, known as OPEC +, are sticking to plans to restore production gradually rather than quickly.
The price of Brent has jumped over 60% this year. In addition to the restriction of OPEC + supply, the recovery was boosted by record gas prices in Europe, which encouraged a switch to oil for power generation in some places.
European gas at TTF’s Dutch hub was worth a crude oil equivalent of around $ 169 a barrel, based on the relative value of the same amount of energy from each source, Reuters based calculations showed. on Eikon data.
First publication: STI