Singapore, Oct. 20 (BNA) Oil prices fell on Wednesday after the Chinese government stepped up efforts to curb record coal price hikes and ensure coal mines operate at full capacity as Beijing moves to ease energy shortages.
Chinese coal and other commodity prices fell in early trade, which in turn pulled oil prices down from a slight rally earlier in the day.
“With coal and gas prices plunging and RSI technical indicators still in overbought territory, the odds of a sharp but substantial drop in oil prices increase,” Jeffrey Halley, chief market analyst at OANDA told Reuters. mentioned.
China’s National Development and Reform Commission said late Tuesday that it will bring coal prices back to a reasonable range and crack down on any irregularities that upset market order or malicious speculation on thermal coal futures.
Brent crude futures fell 43 cents, or 0.5 percent, to $ 84.65 a barrel by 0506 GMT, to trim its 75 percent rise in the previous session, but it is still close to multi-year highs.
US West Texas Intermediate crude futures for November, which expire on Wednesday, were down 37 cents at $82.59 a barrel. The most active December WTI contract was down 45 cents, or 0.6%, at $81.99 a barrel.
“Brent could go down to $82 and WTI to $78.50 a barrel, still comfortably in a strong bull market…Even if oil were to go down $5, I still think it would be short-term.” , according to the analyst. Haley said.
Oil markets in general remain supported on the back of the global coal and gas crisis, which has led to a shift to diesel and fuel oil for power generation.
But the market was also pressured on Wednesday by data from the American Petroleum Institute, an industry group, which showed US crude stocks rose by 3.3 million barrels in the week ending October 15, according to market sources.
That was well above the expectations of nine analysts for a 1.9 million barrel increase in crude stocks in a Reuters poll.
However, US gasoline and distillate inventories, which include diesel, heating oil and jet fuel, fell much more than analysts had expected, indicating strong demand.
Data from the US Energy Information Administration is due later on Wednesday.
HF