Brent crude futures traded above $86 per barrel yesterday, hitting $86.3 as investors took a breather after a rally sent the benchmark oil contract to 3-year highs.
This is as the WTI crude futures swung between gains and losses at around $84 per barrel yesterday as markets await US inventory levels.
The US oil benchmark has been steadily rising since the fourth week of August to reach 7-year highs above $85 due to an extraordinary recovery in demand following the reopening of major economies and shortages of coal and natural gas ahead of the winter season, especially in China.
Concerns about demand from China weighed down on an otherwise bullish market sentiment, after government intervention cooled a surge in energy and coal prices. Still, prospects for a colder-than-usual November month, coupled with OPEC+ countries’ strategy to keep supplies tight, have been pushing the market closer to a squeeze. Later in the day, investors will gauge on API crude oil stocks change to assess the strength of US demand.