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The
market later unwound those gains due to an American Petroleum
Institute (API) report showing rising crude inventories in the
United States and, analysts said, technical indicators
suggesting oil has rallied too fast.
On Monday, the Organization of the Petroleum Exporting Countries
and allies, known as OPEC+, chose to stay with a plan to
increase output gradually and not boost it further as the U.S.
and other consumer nations have been urging.
Brent crude rose as high as $83.47, the highest since October
2018, and at 1115 GMT was down 40 cents, or 0.5%, at $82.16.
U.S. crude climbed to $79.78, the highest since November 2014,
and was later down 35 cents at $78.58.
"An energy crisis is unfolding with winter in the northern
hemisphere still to begin, and sets the stage for even higher
oil prices," said Stephen Brennock of oil broker PVM.
The price of Brent has surged more than 50% this year, adding to
inflationary pressure that could slow recovery from the COVID-19
pandemic. Natural gas has surged to a record peak in Europe and
coal prices from major exporters have also hit all-time highs.
Jeffrey Halley, analyst at brokerage OANDA, said both crude
contracts looked overbought based on a widely followed technical
indicator, the relative strength index.
"That may signal some daily pullbacks this week but does not
change the underlying bullish case for oil," he said.
Some downward pressure came from the API's figures showing signs
of slowing fuel demand.
The industry group said U.S. crude inventories rose by 951,000
barrels in the week to Oct. 1, website Oilprice.com reported,
and gasoline and distillate fuel inventories also climbed.
Attention will focus later on official inventory numbers due at
1430 GMT from the Energy Information Administration. [EIA/S]
(Additional reporting by Naveen Thukral; editing by Jan Harvey
and Jason Neely)
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