Oil rose after falling more than $1 in Tuesday’s session. Saudi Arabia’s energy minister said the gains were due to a weaker dollar and supply concerns.
Benchmark Brent crude futures were up 40 cents to $93.66 per barrel, while December West Texas Intermediate crude futures were up 70 cents to $85.28.
During the trading session, the US dollar index fell, making dollar-denominated oil cheaper for holders of other currencies, helping to boost oil prices.
Supply-demand fundamentals remain broadly stable, placing economic sentiment at the heart of the oil market. Earlier in the day, oil fell more than $1 per barrel on signs of uncertain economic activity in the world’s two largest oil consumers, the United States and China.
According to government data released Monday, China’s crude imports in September were 2% lower than a year earlier. Business activity in the eurozone, the United Kingdom, and the United States contracted in October. If there are no significant changes in behavior, the Federal Reserve of the United States may raise interest rates above 4.5-4.75%.
The White House’s most recent attempt to persuade fuel drillers to drill more was to offer them fixed-price contracts for their oil when it began replenishing the strategic petroleum reserve. The administration intends to do so once oil prices fall between $67 and $72 per barrel.
The industry has rebuked the Biden administration for using it as a price control tool, arguing that it depressed prices in the short term, preventing investment in more accurate production.
Oil companies are expected to maintain their current priorities during this profit season, with some possibly increasing dividends and stock repurchases even further.
The Global Oil Market Will Still Need Russian Oil to Flow
According to Fatih Birol, Executive Director of the IEA, even with the planned price cap, the global oil market will require Russian oil.
Birol said during the International Energy Week in Singapore that the G7 had made efforts to keep Russian crude below market prices.
Last month, the G7 group of the world’s most industrialized countries agreed to end and impose price caps on Russian oil to reduce oil imports for Vladimir Putin’s war chest. The G7 countries ban shipping by sea unless Russian oil is purchased below a certain threshold.
Many experts and analysts believe the price caps serve the dual purpose of reducing Putin’s revenue and supporting Russian oil flows. Putin won’t be able to freeze all energy with top importers China and India joining the cap price.
Natural gas does not emit nearly as much CO2 as other fossil fuels such as coal and oil. However, methane and pollutant leaks during the extraction, production, and distribution processes are hazardous to the environment.
Centrica (CNA.L), British Gas’s owner, announced the acquisition of AvantiGas ON’s natural gas customers on its website on Tuesday without disclosing the value of the transaction.
AvantiGas ON is a Business-to-Business (B2B) supplier that currently provides natural gas to approximately 13,000 business meter points on the British gas grid. The company is also one of the main suppliers of liquefied petroleum gas (LPG) in the UK and a major transporter and supplier of natural gas in many other countries.
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