Oil is stable amid a brighter global economic outlook and strong fuel demand
Oil prices remained stable on Tuesday after two consecutive sessions of gains as the passage of the US Infrastructure Act, strong Chinese exports and a post-pandemic global economic recovery improved the outlook for fuel demand.
Brent crude fell 2 cents to $83.41 a barrel by 07:35 GMT after rising 0.8 per cent on Monday. US oil rose 3 cents to $81.96 a barrel, also after rising 0.8% the day before.
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US President Joe Biden's delayed $1 trillion infrastructure bill, which passed through Congress at the weekend, and higher-than-expected Chinese exports helped paint a picture of a more expansive global economy.
"The big question is whether economies can achieve growth at current high prices or potentially at even higher prices," said Louise Dixon, senior oil markets analyst at Rystad Energy.
Commodities analysts at JPMorgan Chase said global oil demand in November was already almost back to pre-candemic levels of 100 million barrels per day (bpd).
"Consumption is expected to rise further when travel starts in earnest and demand for jet fuel increases," he said.
But as major producers maintained tight supply discipline in October, oil prices rose to a seven-year high and fuel costs also rose.
Biden, however, may take action as early as this week to address the spike in petrol prices, Energy Secretary Jennifer Granholm said on Monday.
"He's definitely exploring what options he has in the limited set of tools the president may have to address the cost of gasoline at the gas station because it's a global market," Granholm told MSNBC.
Reuters polls showed that despite a tougher market, US crude inventories will rise for a third straight week, which may help limit further growth.
"If the US does not get OPEC to respond to its pledge to increase production, it will have its own arsenal of tools to deal with high oil prices," Dixon said.
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