NEW YORK: Oil prices were flat on Wednesday as surging fuel costs for power generation offset expectations for slower crude demand growth as major economies struggle with inflation and supply chain issues.
Brent futures fell 14 cents, or 0.2%, to $83.28 a barrel by 2:03 p.m. EDT (1803 GMT). U.S. West Texas Intermediate (WTI) crude fell 4 cents, or 0.1%, to $80.60.
On Tuesday, WTI closed at its highest since October 2014 for a third day in a row.
Prices came under pressure early when China, the world’s biggest crude importer, released data showing September imports fell 15% from a year earlier.
China, along with Europe and India, faces coal and natural gas shortages that have boosted prices for the fuels burned for electricity generation. Oil products are being used as a substitute.
The European Commission outlined measures the European Union could use to combat surging energy prices, and said it would explore joint gas purchasing among countries.
The Organization of the Petroleum Exporting Countries (OPEC) trimmed its world oil demand growth forecast for 2021 while maintaining its 2022 view.
But OPEC said surging natural gas prices could boost demand for oil products as end users switch.
“Today’s monthly OPEC report appeared to offer something for both the bulls and the bears with the Agency unexpectedly reducing their global oil demand forecast... for this year while adjusting their non-OPEC supply growth estimate downward,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.
Global markets should not expect more oil from Iran in the near future. The United States said it was ready to consider “all options” if Iran is unwilling to return to the 2015 nuclear deal.
In Russia, President Vladimir Putin said oil prices could reach $100 a barrel and noted Moscow was ready to provide more natural gas to Europe if requested.
Energy markets are focused on how the supply crunch will affect oil demand, especially in the world’s second biggest economy China.
“These are troubling times for China. A severe energy crisis is gripping the country,” said Stephen Brennock of broker PVM.
In India, September fuel consumption crawled higher as economic activity ramped up, but soaring global oil prices could stall a recovery in the world’s third-biggest oil importer.
In the United States, the government projected consumers will spend more to heat their homes this winter than last year due mostly to surging energy prices.
The White House has been speaking with U.S. oil and gas producers in recent days about helping to bring down rising fuel costs, according to two sources familiar with the matter.
U.S. gasoline futures were on track for their highest close since October 2014 for a fourth day in a row.
The market is awaiting U.S. oil inventory data, delayed by a day following the Columbus Day holiday on Monday. Data from the American Petroleum Institute, an industry group, is due at 4:30 p.m. EDT (2030 GMT) on Wednesday and from the U.S. Energy Information Administration on Thursday.