OPEC revised down estimates for global oil consumption for the rest of 2021. The organization states amid skyrocketed price of natural gas could add to fuel switching to petroleum in power generation sectors but it could potentially see cut back in demand in areas such a refinery.
U.S. oil futures weakened after the report came out however prices still remains bullish.
OPEC estimates shows global oil demand for the rest of 2021 will reduce to 5.8 million a barrel down from 5.96 million a barrel previously estimated. The cut in estimates accounts to lower consumption data in the first nine months of the year. However, fourth quarter demand was revised up to a range of 120,0000 barrels a day to 99.82 million barrels a day.
Crude oil prices saw highest price surge this year since 2014 amid rebound of economic activity globally with widening demand and supply gap in crude oil. In addition, crude oil price anticipated heavy demand as natural gas and coal prices reached record high due to supply shortage. Energy prices are expected to see wilder swings ahead of winter with some speculative market participants anticipating $100/barrel oil.
Bob Iaccino in his interview Alpha Trader said the speculation of $100/barrel is “possible”. He added the speculative pressure could drive up price with possibility to dip down to $70 level before the big drive to $100 level.
WTI futures closed at $81.08 up by 0.80% while henry hub natural gas closed at 5.71 inching up by 5.08% on Wednesday.