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Oil prices fall on fears faltering economic growth to hit demand

Brent crude futures were down 76 cents, or 0.9%, at $82.66 a barrel at 1406 GMT. US West Texas Intermediate (WTI) crude futures fell 80 cents or 0.9% to $79.84 a barrel.

Oil Prices | Crude Oil | Brent crude

Reuters  |  LONDON 

(Photo: Bloomberg)
(Photo: Bloomberg)

By Noah Browning

LONDON (Reuters) - edged down on Wednesday as expectations grew that demand growth will fall as inflation and supply chain issues strain major economies, though surging prices for power generation fuel limited losses.

futures were down 76 cents, or 0.9%, at $82.66 a barrel at 1406 GMT. U.S. West Texas Intermediate (WTI) crude futures fell 80 cents or 0.9% to $79.84 a barrel.

Weighing on prices, China, the world's biggest crude importer, released data showing September imports fell 15% from a year earlier.

China, along with Europe and India, remains mired in coal and natural gas shortages that have pushed up prices for the fuels burned for electricity generation and are leading to oil products being used as a substitute.

Producer club OPEC said in its monthly report on Wednesday that record high natural gas prices could boost oil demand.

"Should this trend continue, fuels such as fuel oil, diesel, and naphtha could see support, driven by higher demand for power generation, refining and petrochemical use," OPEC said.

The bigger issue for the markets, however, is the impact of the crisis, especially in the world's second biggest economy China, on oil demand.

"These are troubling times for China. A severe crisis is gripping the country," said Stephen Brennock of broker PVM.

The International Monetary Fund on Tuesday cut its growth outlook for the United States and other major economies on worries supply chain disruptions and cost pressures are holding back a global economic recovery from the pandemic.

A strong U.S. dollar, trading near a one-year high, also weighed on oil prices, as it makes oil more expensive for those holding other currencies.

The market is awaiting U.S. oil inventory data, delayed by a day following the Columbus Day holiday on Monday.

Data from the American Petroleum Institute, an industry group, is due at 4:30 p.m. EDT (2030 GMT) on Wednesday and from the U.S. Information Administration on Thursday.

(Additional reporting by Sonali Paul in Melbourne and Florence Tan in Singapore; Editing by Emelia Sithole-Matarise, Barbara Lewis, Louise Heavens and Jan Harvey)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Wed, October 13 2021. 20:18 IST