Tokyo, Sept. 21 (BNA): Oil prices rose on Tuesday as analysts pointed to indications of tight supply in the United States, ending days of losses as global markets remain haunted by the potential impact on the Chinese economy of a crisis in debt-laden property group China Evergrande. .
Brent crude rose 63 cents, or 0.9 percent, to $74.55 a barrel by 03:40 GMT, after falling nearly 2 percent on Monday. The West Texas Intermediate (WTI) contract, which expires later on Tuesday, was up 69 cents, or 1%, at $70.98 after falling 2.3% in the previous session, Reuters reported.
ANZ analysts said global utilities are switching to fuel oil due to higher gas and coal prices, and long-term outages from the Gulf of Mexico after Hurricane Ada suggest less supplies are available.
“While slowing Chinese economic growth and uncertainty over the Fed’s tapering schedule are weighing on market sentiment, other developments continue to point to higher oil prices,” ANZ Research said in a note.
However, investors across financial assets have been affected by the fallout from the debt-laden city of Evergrande and the threat of a broad market jolt in the long term.
“The problems of Evergrande threaten the outlook for the world’s second largest economy and are causing some investors to question the growth outlook in China and whether it is safe to invest there,” said Edward Moya, chief market analyst at OANDA.
While this view of the state of the Chinese economy weighs on the markets, the US Federal Reserve is also expected to start tightening monetary policy – likely to make investors wary of riskier assets like oil.