Crude oil steadies after recording a mind-blowing rally

Highlights

  • Crude oil prices were steady on Tuesday after recording a mind-blowing rally.
  • Power prices in various parts of the world surged including Asia and Europe to record high levels.
  • The International Monetary Fund squeezed its growth forecast for 2021 to 5.9% from 6.0% made in July.

Crude oil prices were steady on Tuesday after recording a rally that has brought the prices to multi-year high levels, raising concerns that higher energy costs would hamper the economic growth. December delivery Brent Crude oil futures last traded at US$83.20 per barrel down 0.08%, whereas November delivery WTI crude oil futures traded 0.20% down at US$80.48 per barrel as of 13 October 2021 at 11:53 AM AEDT.

The prices of Brent crude have risen for a fifth consecutive week while WTI crude has notched to seven weeks of gains. Both the benchmarks have gained more than 15% since September.

Power prices in various parts of the world surged including Asia and Europe to record high levels. China on the other hand is expected to face the energy crisis throughout 2021, folding growth in the country known for its exports.

Inflation Pressure

The International Monetary Fund (IMF) has cut its growth outlook for the US and other industrial powers stating that inflation pressure and supply chain disruptions may slow down the economic recovery after the pandemic.

IMF squeezed its growth forecast for 2021 to 5.9% from 6.0% made in July. However, the global growth forecast for 2022 remained the same at 4.9%.

OPEC

Source: © Gumpapa | Megapixl.com

The Organization of the Petroleum Exporting Countries along with its allies, together known as OPEC+ had decided to increase the output gradually by 400,000 bpd to phase out the current production cut of 5.8 million bpd.

Bottom Line

Crude oil prices remain steady on Tuesday followed by a strong rally that pushed the prices to multi-year highs on the back of higher energy demand and tight supplies.

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