Oil ended modestly higher after a choppy session as concerns over growing tight supply outweighed fears over the state of China’s economy.
Futures in New York closed 0.4% higher, posting the first gain in nearly a week as traders focused on supply constraints in the U.S. Gulf of Mexico following lasting damage from Hurricane Ida. These trumped worsening financial troubles at China’s Evergrande Group, which could spill into the rest of the property sector and threaten the country’s economy. “There are supply issues all around the market,” said John Kilduff, a partner at Again Capital LLC.
Oil has resumed its advance over the past month, in part due to a tightening of the market following lingering supply disruptions from U.S. storms. At the same time, consumption is coming into focus in anticipation that soaring natural gas prices will force a shift toward oil. Meanwhile, the lifting of U.S. travel restrictions could add as much as 200,000 barrels a day of jet fuel demand, according to Energy Aspects Ltd.
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