Oil prices have fallen on fears of a slowing economy causing sluggish demand
- China's coal prices have hit a new record high.
- IMF cuts growth outlook for major economies as the financial institution cuts interest rates for those economies.
- China Sept crude imports down 15% y/y-
LONDON, Oct 13, Oil prices eased on Wednesday amid fears that oil demand will decrease as major economies suffer from inflation and supply chain difficulties, despite rising prices for coal and natural gas limiting losses.
Brent crude futures fell 24 cents, or 0.2%, to $83.18 a barrel at 0830 GMT. West Texas Intermediate (WTI) crude futures fell 23 cents or 0.2% to $80.41 a barrel in the United States.
Both contracts slid after falling as much as 70 cents earlier when China, the world's largest crude importer, released data showing September imports fell 15% from a year earlier.
However, China, along with Europe and India, remains blighted by coal and natural gas shortages, which have driven up electricity generation fuel costs.
China is in a difficult position right now. "A severe energy crisis is gripping the country," according to Stephen Brennock of broker PVM.
"The current price point will exert a strain on foreign crude purchases while also incentivizing fewer domestic oil stocks."
Meanwhile, the International Monetary Fund cut its growth outlook for the United States and other major economies on Tuesday because of concerns supply chain disruptions and cost pressures are limiting a global economic recovery from the coronavirus epidemic.
A strong United States dollar, trading near a one-year high, weighed on oil prices as it made it more expensive for those holding other currencies. read more
However, oil watchers remain undecided about whether rising gas and coal prices will increase demand for oil products for power generation.
According to ANZ Research analysts, "there are increasing expectations that rising gas and thermal coal prices will stimulate demand for alternative fuels such as diesel and fuel oil."