“Balances between supply and demand show that the market is experiencing a supply deficit, which is driving a sharp drop in inventories and driving prices,” said Louise Dickson, senior oil markets analyst at Rystad Energy, adding : “This market tightness is expected to extend into much of 2022, and oil demand will only match supply in the fourth quarter of next year.”
On the other hand, falling temperatures in China reignited concerns about whether the world’s largest energy consumer can meet local demand for heating. “Oil, coal and natural gas prices are likely to remain high,” traders and analysts said.
Official data showed that the energy crisis that is increasing prices is also hurting Chinese economic growth, which was at its lowest level in a year.
Finally, oil production in the United States is expected to rise, limiting the advance in prices. Pumping in the world’s largest oil producer’s main shale formation is expected to have continued to rise last month, according to the Energy Information Administration (EIA).
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