Oil is slightly down and breathing, after gains triggered by energy crisis and recovery in global demand
Oil prices fell on Tuesday. It fell for the first time in four days, which analysts are calling a respite, after weeks of gains triggered by a recovery in global demand that has caused energy shortages in major global economies.
Brent crude fell 6 cents to $83.59 a barrel at 0440 GMT, after rising 1.5% on Monday to hit three-year highs.
West Texas Intermediate (WTI) oil, which gained 1.5% in the previous session, which reached the highest in around seven years, fell 13 cents to $80.39 a barrel.
According to analysts, there is still a lot of momentum behind the oil rally and fundamentals remain extremely positive. It is said that it will not be a surprise for oil to rise to triple digits again this year.
Energy prices have soared to record highs in recent weeks due to energy shortages in Asia, Europe and the United States. Rising natural gas prices are also encouraging power generators to replace cleaner-burning fuel with oil.
Analysts estimate that the switch from natural gas to oil for power generation could increase global crude oil demand by between 250,000 and 750,000 barrels per day.
In China, where major industrial areas are grappling with power outages, thermal coal futures rebounded as prices rose more than 10% on Tuesday. The government has announced that it will fully liberalize the country's thermal energy market by increasing incentives.
Higher energy prices are also contributing to inflationary pressures in recovering economies. Japan's wholesale inflation was at a 13-year high in September, data released on Tuesday showed.
Qatar, the world's largest producer of liquefied natural gas (LNG), said on Monday it was unable to help supply more fuel to the market and was disturbed by high gasoline prices.
Related Articles
Oil prices are rising as supply concerns increase amid expectations of a prolonged conflict in the Middle East
Oil prices continued to rise following US and Iranian attacks on ships serving their respective purposes
Oil prices closed higher this week following renewed US-Iran hostilities
