Oil slips after gains on rosier outlook for global economy, fuel demand

Tokyo, Nov. 9 (BNA): Oil prices fell on Tuesday after two consecutive sessions of gains as the passage of the US Infrastructure Act, Chinese exports and the global recovery after the epidemic raised expectations for fuel demand.

Brent crude was down 10 cents at $83.33 a barrel by 0410 GMT, after rising 0.8 percent on Monday. US oil fell 6 cents to $81.87 a barrel, also after rising 0.8% the previous day.

Long-awaited US President Joe Biden’s $1 trillion infrastructure bill — which passed through Congress over the weekend — and better-than-expected Chinese exports helped paint a picture of a more expanding global economy.

“The big unknown is whether economies can achieve growth amid the current high price environment, or perhaps in a higher price scenario,” said Louise Dixon, senior oil markets analyst at Rystad Energy, according to Reuters.

Commodity analysts at JPMorgan Chase said global oil demand in November had already nearly returned to pre-pandemic levels of 100 million barrels per day.

“More consumption growth lies in wait once travel starts in earnest and demand for jet fuel increases,”

But while major producers maintained strict supply discipline in October, oil prices rose to their highest in seven years, with fuel prices also rising.

Energy Secretary Jennifer Granholm said Monday that Biden may take action as early as this week to tackle rising gasoline prices.

“He’s definitely looking at his options in the limited range of tools a president might need to deal with the cost of gasoline at the pump, because it’s a global market,” Granholm told MSNBC in an interview.

Reuters polls showed that despite the tight market, US crude inventories are expected to rise for a third consecutive week, which could help limit other gains.

“If the United States does not make OPEC+ heed its pledge to increase production, it has its own arsenal of tools to deploy to combat the high prices of refined petroleum products,” Dixon said.

HF