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Highlights
- Crude oil rises on Tuesday.
- Brent crude hovered near US$85 per barrel.
- Fast recovery from the pandemic has increased global demand.
Crude oil prices climbed up on Tuesday to trade near multi-year highs due to rising energy demand across the globe and China’s concerns to meet energy demands as winters proceeds in the country. December delivery Brent Crude oil futures last traded at US$85.10 per barrel down 0.04%, whereas December delivery WTI crude oil futures traded 0.01% up at US$82.45 per barrel as of 20 October 2021 at 11:54 AM AEST.
Also Read: Oil falls on US crude oil recovery
Rapid recovery from the pandemic has increased the global demand quickly putting pressure on the supply side. In addition to that, the falling temperature in the Northern Hemisphere as winters proceeds in the region has also pressurized the energy demand.
Crude oil’s robust recovery
A significant rise in crude oil prices has been witnessed due to significant switching from gas-to-oil for the generation of electricity in power plants as the gas prices shoot up. Rising coal prices in China have also increased the demand for crude oil.
Related Article: Oil rises on higher-than-expected drawdown in the US crude inventories
The ongoing power crunch in the country has pushed down China's economic growth, which fell to its lowest level in the last one year. The skyrocketing natural gas and coal prices in Asia are expected to cause users to switch to lower-cost crude oil, as an alternative.
Source: Copyright © 2021 Kalkine Media
Image Description-Oil supply constraints
As per the American Petroleum Institute, crude oil inventories coupled with gasoline and distillate inventories tumbled last week. However, the US government data on inventories is due on Wednesday.
Also Read: Crude oil dips on China’s supply plan
Bottom Line
Brent Crude oil prices hovered near multi-year highs on Tuesday amidst a strong demand due to solid recovery from pandemics and tight supplies.
