Brent crude oil futures rose by 28 cents or 0.3% to $83.46 per barrel, after a 0.3% drop on Wednesday. Oil prices recovered from previous losses due to expectations that rising natural gas prices as winter approaches may lead to a shift to oil to meet heating fuel demand. U.S. West Texas Intermediate crude also increased by 22 cents or 0.3% to $80.66 per barrel, following a 0.3% decline the day before.
Hiroyuki Kikukawa, General Manager of Research at Nissan Securities, stated, "Investors are betting that higher gas prices will encourage power generation plants to switch to oil as the winter demand season approaches." Prices were also supported by concerns over supply shortages after the U.S. Energy Information Administration reported on Wednesday that crude oil production in the United States, the world's largest producer, would decline more than previously expected in 2021 before rising again in 2022.
The American Petroleum Institute reported late Wednesday that U.S. crude inventories increased by 5.2 million barrels for the week ending October 8, according to market sources who accessed the institute's data. The sources noted that the American Petroleum Institute also stated that gasoline stocks fell by 4.6 million barrels, and distillate inventories decreased by 2.7 million barrels. Analysts surveyed by Reuters forecasted a crude oil inventory increase of 700,000 barrels.
The Organization of the Petroleum Exporting Countries (OPEC) lowered its projections for global oil demand growth for 2021 in its latest monthly report on Wednesday, while maintaining its forecast for 2022. Nevertheless, the group indicated that rising natural gas prices could boost demand for petroleum products.
