Oil prices rose on Tuesday amid rising energy demand concerns
Falling temperatures in China, the world's largest energy consumer, have revived concerns about its ability to meet heating demand needs due to electricity and coal shortages, while offsetting previous losses in oil. Prices rose on Tuesday.
Brent crude rose 24 cents, or 0.3%, to $84.57 a barrel as of 0541 GMT, after falling 0.6% on Monday. The contract is still up about 7% this month.
West Texas Intermediate (WTI) futures rose 35 cents, or 0.4%, to $82.79 a barrel, up 0.2% in the previous session and nearly 10% this month.
Brent fell on Monday after China announced growth figures that disappointed the market. As winter approaches in the northern hemisphere, temperatures drop and heating demand rises, traders and analysts say oil, coal and gas prices will remain high.
Tightness in energy markets means that supply-side problems continue to dominate and commodity prices continue to be supported.
Rising coal and gas prices in Asia are expected to cause some end users to switch to lower-cost oil as an alternative.
Coal futures in China rose as much as 7.8% on Tuesday, with riskier assets such as equities also rising.
But electricity shortages, which have driven up prices, are also hurting China's economic growth, which has slumped to a one-year low, official data showed on Monday. China's daily crude oil processing rate also fell again last month to its lowest level since May last year.
U.S. oil production is poised to rise, which helps keep prices contained. Production at the largest shale formation in the United States, the world's largest oil producer, is expected to increase further next month, according to an official report.
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