By Geoffrey Smith
Investing.com — Crude oil prices were little changed in early trading in New York on Tuesday, still well supported by tight spot markets, an ongoing energy crisis in China and a broad recovery in global demand.
U.S. Gasoline RBOB Futures were down 0.1% at $2.3765 a gallon.
Prices seemed to have found a range for the present, pending new developments on the supply-demand balance. Those may have to wait a while yet, given that U.S. inventory data from the American Petroleum Institute will only be released on Wednesday due to the Columbus Day holiday.
The holiday weekend was otherwise a solid illustration of the rebound in demand from the U.S. air travel industry: Passenger numbers at domestic airports are now back within 20% of their pre-Covid levels in 2019, even if things didn’t turn out quite as planned, due to disruptions that hit Southwest Airlines (NYSE:LUV) particularly hard.
There was little lasting impact on the market from a story on Monday suggesting that Saudi Arabia would increase shipments to Asian customers in November. in as much as the extra cargoes won’t represent additional output above and beyond what the kingdom has been granted under the OPEC+ deal. Saudi Arabia, Kuwait and Iraq have all cut official selling prices for November in an attempt to defend market share, consistent with OPEC’s message at the start of the month that underlying demand may not be as strong as the global spot market currently suggests. Those outside the bloc have seen such arguments as an attempt to squeeze prices higher to refill state coffers that were hit hard by last year’s price collapse.
The International Monetary Fund shaved its global growth forecast by 0.1% to 5.9% earlier Tuesday as it published its new World Economic Outlook but left its forecast for 2022 unchanged at 4.9%, something that doesn’t imply any further weakening in oil demand.
Oil prices continued to enjoy support from other parts of the energy market, with fresh flooding in China stopping production at more coal mines, pushing the cost of alternatives to oil even higher. While the Chinese energy system’s ability to switch from coal to oil at short notice is very limited, it also squeezes spot prices for liquefied natural gas higher, which are then supported at the U.S. natural gas hub. U.S. natural gas futures rose 0.6% to $5.3760, stabilizing after last week’s spike unwound partially.
Crude Oil Flat as Market Waits Another Day for U.S. Inventory Data
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