Oil sees a Rise of 1% as Supply Begins to Tighten

As U.S tightens supply, oil prices rose on Tuesday after a series of losses as world markets continue to suffer from the Chinese Evergrande crisis.

Bent crude went up 1.3% to $74.87 per barrel after falling by 2% on Monday. The WTI went up by 1.3% to $71.20 per barrel after showing a drop of 2.3% in the session prior.

The demand for fuel oil is growing rapidly due to increase in gas and coal prices. The persistent outages form the Gulf of Mexico caused by the devastating Hurricane Ida have pointed to the fact that supply will be limited.

ANZ analysts said, “While slowing Chinese economic growth and uncertainty around the US Fed tapering timetable weighed on market sentiment, other developments still point to higher oil prices.”

The heavily indebted Evergrande has caused shook the financial market across the globe, causing stocks to fall. Edward Moya, analyst at OANDA stated, “Evergrande’s woes are threatening the outlook for the world’s second largest economy and making some investors question Chinas growth outlook and whether it is safe to invest there.”

The upcoming fed meeting is beginning to weigh on U.S markets as it is expected that tightening of monetary policy will take place. This will push investors to avoid risky assets such as oil.