Oil prices mixed, yet strong on solid US demand, global energy crunch
Tightening supply raises market concerns as OPEC and allies stick to planned slow supply increase
Oil prices were mixed on Thursday but remained buoyant on the back of an unexpected decline in US inventories, signaling solid demand with the switch to fuel oil amid a global gas and coal shortage.
International benchmark Brent traded at $85.28 a barrel at 0728 GMT for a 0.63% fall after trade in the previous session ended at $85.82 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $83.11 per barrel at the same time for a 0.37% decrease from $83.42 a barrel at the end of the previous trading session.
According to the latest data released by the Energy Information Administration (EIA) late Wednesday, US commercial crude oil inventories far exceeded expectations falling by 400,000 barrels during the week ending Oct. 15 against an anticipated 2.2 million-barrel rise.
Strategic petroleum reserves, which are not included in commercial crude stocks, also decreased by 1.7 million barrels, while gasoline inventories declined by 5.4 million barrels over that period.
The unexpected decline in inventory indicates an increase in demand in the US, the world's largest oil consumer, supporting higher prices.
Soaring natural gas and coal prices continue to push the upward price trend, with producers encouraged to shift from gas to oil ahead of the winter season.
Moreover, a tightening supply raises market concerns as the Organization of Petroleum Exporting Countries and allies, known as OPEC+, is sticking to its planned slow supply increase.
Experts predict that price fluctuations will continue from the supply-demand imbalance.