Chinese energy demand raises oil prices

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LONDON (Reuters) – It rose oil prices On Tuesday, as supplies of natural gas, electricity and coal continued to crunch around the world, and cooler temperatures in China revived concerns about whether the world’s largest energy consumer can meet domestic heating demand.
Brent crude rose 35 cents, or 0.4 percent, to $84.68 a barrel by 0827 GMT, after falling 0.6 percent on Monday. The contract is still up nearly 7 percent since the start of the month.
US West Texas Intermediate crude futures gained 70 cents, or 0.9 percent, to $83.14, after rising 0.2 percent in the previous session and about 10 percent this month.
“When the market is bullish, it’s usually Brent crude that leads the way up, but this time local issues (in the US) provide additional support,” said Tamas Varga, oil analyst at brokerage BVM Oil Associates in London. for West Texas Intermediate Crude.
“The recent hurricane season has proven to be so devastating that (US) producers have not fully recovered from the damage caused by (Hurricane) Ida,” he added.
Traders and analysts said that with temperatures dropping as winter approaches in the Northern Hemisphere and heating demand increased, oil, coal and natural gas prices are likely to remain elevated.
Cold weather has already begun to prevail in China, with temperatures close to freezing expected in the northern regions, according to AccuWeather.
China’s coal futures rose 7.8 percent today, while riskier assets such as stocks also rose. Rising coal and natural gas prices in Asia are expected to cause some end users to switch to low-cost oil as an alternative.
But official data showed yesterday that the energy crisis that caused prices to rise is also hurting China’s economic growth, which fell to its lowest level in a year.




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