Sign up now for FREE unlimited access to Reuters.comSign up NEW YORK, Sept 12 (Reuters) – Oil prices rose on Monday, shrugging off weaker demand expectations as supply concerns grow heading into winter. Brent crude futures were up $1.16, or 1.3%, at $94.00 a barrel. U.S. West Texas Intermediate crude was up 99 cents, or 1.1 percent, at $87.78. U.S. emergency oil inventories fell by 8.4 million barrels to 434.1 million barrels in the week ended Sept. 9, their lowest level since October 1984, according to data released Monday by the U.S. Department of Energy ( DOE). Sign up now for FREE unlimited access to Reuters.comSign up US President Joe Biden in March laid out a plan to release 1 million barrels a day from the Strategic Petroleum Reserve to address high US fuel prices, which have helped fuel inflation. The Biden administration is weighing the need for further SPR issuance after the current program expires in October, Energy Secretary Jennifer Granholm told Reuters last week. Global oil supplies are expected to be further strengthened when the European Union’s embargo on Russian oil takes effect on December 5. The G7 will impose a price cap on Russian oil to limit the country’s oil export revenue, seeking to punish Moscow for its invasion of Ukraine, while taking steps to ensure oil could continue to flow to the emerging countries. read more The U.S. Treasury Department, however, warned that the cap could drive U.S. oil and gasoline prices even higher this winter.[nL1N30I0BQ[nL1N30I0BQ[nL1N30I0BQ[nL1N30I0BQ The EU’s executive European Commission is set to unveil a package of measures on Wednesday to help power companies facing a liquidity crisis. read more France, Britain and Germany said on Saturday they had “serious doubts” about Iran’s intentions to revive a nuclear deal. Failure to revive the 2015 deal will keep Iranian oil off the market and keep global supply tight. read more In more bearish market news, China’s oil demand could contract for the first time in two decades this year as Beijing’s zero-covid-19 policy keeps people at home during the holidays and cuts consumption fuel. read more “The lingering presence of headwinds from China’s renewed virus restrictions and further moderation in global economic activity could still raise some reservations about a more sustained rally,” said Jun Rong Yeap, strategic market analyst at IG . US domestic oil production is also expected to rise in the coming months. Oil production in the Permian Basin in Texas and New Mexico, the largest US shale oil basin, is expected to rise by 66,000 barrels per day (bpd) to 5.413 million bpd in October, according to the US Energy Information Administration (EIA) productivity report on Monday. The European Central Bank and the US Federal Reserve, meanwhile, are poised to raise interest rates further to tackle inflation, which could strengthen the US currency and make dollar-denominated oil more expensive for investors. “A strong dollar would act as an inverse correlation to dollar-denominated commodities and likely act as a brake on upside gains in the energy market,” said Bob Yawger, director of energy futures at Mizuho. Sign up now for FREE unlimited access to Reuters.comSign up Reporting by Laura Sanicola in New York Additional reporting by Noah Browning, Florence Tan and Jeslyn Lerh Editing by Deepa Babington and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles. Laura Sanicola Thomson Reuters Reports on oil and energy, including refineries, markets and renewable fuels. He previously worked at Euromoney Institutional Investor and CNN.
