By Adedapo Adesanya
Oil prices were mixed on Thursday as China was prepared to buy more oil and other energy supplies to meet growing demand as the market continues to weigh the unexpected rise in crude inventories and a strong Dollar in the United States.
At the trading session, the Brent crude fell by 0.17 per cent or 13 cents to sell at $78.51 per barrel, while the US West Texas Intermediate (WTI) appreciated by 0.08 per cent or 6 cents to trade at $74.89 per barrel.
Chinese Premier Li Keqiang said the world’s biggest crude importer and second-largest consumer will ensure its energy, power supply and will keep economic operations within a reasonable range.
It plans to do this as it has been suffering from a shortage of electricity, partly due to high prices for coal and natural gas, raising worries about the nation’s economy and has ordered top energy firms to secure supplies for winter at all costs.
This is coming at a time when in addition to the power crisis, the housing market is also raising concerns because any fallout for the world’s second-biggest economy is likely to affect oil demand.
The market was, however, still reeling as US oil and fuel stockpiles increased last week, the country’s Energy Department’s Energy Information Administration (EIA) said on Wednesday.
Crude inventories were up by 4.6 million barrels in the week to September 24 to 418.5 million, EIA data showed, compared with analysts’ expectations for a 1.7 million-barrel drop.
Making the market even more bearish was the US Dollar, which held near one-year highs, making oil more expensive for holders of other currencies.
The dollar index, which measures the US currency against a basket of six major currencies, rose for the fourth consecutive day, to 94.435, its highest since late September of last year.
On the demand side, British petrol stations are still seeing unprecedented demand with more than a quarter of pumps still dry as the fuel crisis cut road traffic volumes to the lowest level since the COVID-19 lockdowns ended two months ago.
For the supply side of the market, the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, are next week expected to hold to a pact to add 400,000 barrels per day to their output for November.
Modupe Gbadeyanka