Oil prices remained high on Tuesday, after beginning the week at their highest level in years.
Brent Oil Futures traded at $84.33 while WTI Futures were up 0.04 per cent at $81.72.
Last week, both Brent and WTI futures increased by at least 3%.
Analysts predict that oil, coal, and gas prices will remain elevated as winter approaches in the northern hemisphere.
“A severe winter has the potential to propel energy prices much higher,” Citi Research commodities analysts wrote in a report. They raised their projection for Brent oil for the remainder of 2021 to $85 per barrel from $74 per barrel. According to AccuWeather.com, the temperature in China should drop to around freezing in the north.
However, increased US oil output may put a floor under prices. According to an official source, a further increase in production at the most significant shale formation in the United States should come next month.
China’s slowing economic development may influence prices, as GDP in the third quarter of 2021 increased by 0.2 per cent quarter on quarter and 4.9 per cent year on year.
Gold was up in Asia on Tuesday morning, owing to decreases in the dollar and US government yields, which aided the yellow metal. Moreover, gold futures were up 0.57 per cent to $1,775.75 per ounce. The dollar, which generally swings in the opposite direction of gold, fell on Monday. Benchmark 10-year Treasury yields in the United States were also falling. According to industry statistics issued on Monday, industrial production in the United States decreased 1.3 per cent month on month. It climbed at a slower-than-expected 4.6 per cent year on year in September. A continuing global semiconductor shortage contributed to a reduction in motor vehicle output, demonstrating that supply restrictions are impeding COVID-19 economic recovery.
The Reserve Bank of Australia issued the minutes of its most recent meeting in the Asia Pacific earlier in the day.
Meanwhile, the Bank of Canada’s business outlook poll released on Monday predicted greater demand as COVID-19 outbreaks are contained. However, it also stated that existing supply bottlenecks could limit sales and drive up costs. Silver increased by 0.5 per cent, platinum increased by 0.4 per cent, and palladium increased by 0.3 per cent.
Nornickel, the world’s largest palladium producer, announced that it had launched a competition for scientists to find innovative ways to use the metal. A chip scarcity in the auto industry, Nornickel’s largest consumer sector, has harmed palladium.
Aluminium smelting is one of the businesses that could see power prices rise. It also stated that power customers who do not have term supply contracts would have to pay the premium beginning this month. Charges with term contracts would need to be renegotiated according to the new power price system.