Greater demand ahead of winter drives oil prices up amid energy crunch

By Firdevs Yuksel

ISTANBUL (AA) - Oil prices rose on Tuesday offsetting earlier losses, as demand concerns intensified from the easing of pandemic restrictions and the upcoming winter heating season amid the energy crunch.

International benchmark Brent traded at $84.76 a barrel at 0750 GMT for a 0.51% rise after trade in the previous session ended at $84.33 a barrel.

American benchmark West Texas Intermediate (WTI) registered at $82.36 per barrel at the same time for a 0.82% increase from $81.69 a barrel at the end of the previous trading session.

Soaring coal and gas prices, which are making oil a more desirable alternative for power generation ahead of the winter heating season, are also triggering demand concerns, outstripping supply and driving oil prices up.

Prices were also supported by announcements in the US, Australia and across Asia over the lifting of restrictions from COVID-19, which are expected to boost fuel consumption.

However, weak data on US industrial output and disappointing China macroeconomic data are stoking demand concerns.

US industrial production fell short of market expectations and decreased month-on-month by 1.3% in September, according to data released by the Federal Reserve on Monday.

The Chinese economy, the world's second-biggest economy, grew by 4.9% in the third quarter, also below expectations. The slowdown was primarily due to a deceleration in the housing sector and the energy supply shortage. Accordingly, the country's industrial output also fell below market forecast by 3.1%.

On the supply side, US production from shale basins is expected to rise in November, according to the Energy Information Administration's Drilling Productivity Report on Monday.