Tight supply concerns continue crude oil closed higher New Zealand oil hit a new high in more than seven years

News on October 27, crude oil futures closed higher as the market expected global supply to continue, and New York crude oil hit a seven-year high
.

West Texas Intermediate crude for December delivery rose 89 cents, or 1.
1 percent
, to settle at $84.
65 a barrel on the New York Mercantile Exchange.
According to Dow Jones market data, this is the highest closing point
for a front-month contract since October 13, 2014.
Brent crude, the global benchmark for the ICE Futures Exchange in December, rose 41 cents, or 0.
5 percent, to $86.
40 a barrel, its highest level
since October 2018.
The most actively traded January Brent crude futures contract rose 48 cents, or 0.
6 percent
, to $85.
65 a barrel.

Louise Dickson, senior oil market analyst at Rystad Energy, said in the Daily Market Review: "There is little that can deviate oil prices from their upward momentum in the short term, as the only significant real source of supply is OPEC+, and there doesn't seem to be much sentiment to change policy
in this regard at the moment.
OPEC+, which comprises the Organization of the Petroleum Exporting Countries and its allies, will meet next April to discuss oil production
.

"There are only two reasons for the current oil price volatility, one is that OPEC+ is taking supply action, but the organization has repeatedly said it does not intend to change its strategy
," Dickson said.
"Another round of Covid outbreaks and lockdowns could once again dim the outlook for demand
.
" But for many economies tired of repeating unwelcome processes of economic disruption, it seems like a last resort
.
”

Russian Deputy Prime Minister Alexander Novak said on Monday (Oct.
25) that he expects OPEC+ to agree next week to increase production by another 400,000 barrels per day in November, in line with the timetable
agreed earlier this year.

Craig Turner, senior commodities broker at Daniels Trading Division at StoneX Financial, said in an emailed comment: "Unless OPEC countries feel threatened by non-OPEC countries entering and occupying market share, it is difficult to see OPEC increase supply
.
" 。 OPEC is not subject to stiff competition from U.
S.
shale producers as it was seven years ago, and that these shale producers "can't start new production overnight," even though $85 crude is profitable for them
, he said.

However, traders are also cautious about a possible resumption of Iran nuclear talks, which could eventually lead to more crude oil
in the market.
Phil Flynn, senior market analyst at Price Futures Group, said the market had "no change in trading on both sides"
until prices showed a more steady rise on Tuesday (Oct.
26) afternoon.
He said most traders "doubted" that any nuclear talks between Iran and world powers would make much progress
.

U.
S.
special envoy for Iran, Robert Marley, warned that efforts to resume Iran's nuclear talks, which were suspended in June, were entering
a "critical phase," Al Jazeera reported on Monday.
Iran has said it is willing to return to negotiations, but hopes the outcome of the talks will lead to the lifting
of sanctions.
If the United States lifts sanctions on Iranian oil, it will lead to an increase
in global oil supplies.

At the same time, Flynn said, some traders are "skeptical that oil prices are rising too far and too fast," so they are reluctant to push prices
higher "until we have a better grasp of crude inventories this week.
" He expects the oil market in the coming days.
.
.
There will be some extreme volatility, but there is no doubt that global inventories are tight and there appears to be significant upside risks to oil prices, although they are likely to stabilize in the near term
.
”

Commerzbank commodities analyst Carsten Fritsch noted that gas prices "are driven
by forecasts of lower temperatures over the next two weeks and the expected increase in LNG exports as maintenance work at many liquefaction facilities has been completed.
" Both scenarios could increase demand for U.
S.
natural gas and lead to a decline in U.
S.
natural gas inventories, which are 4 percent
below the 2016-20 average shortly before the heating season begins.
”

The U.
S.
Energy Information Administration will release weekly U.
S.
oil supply data
on Wednesday (Oct.
27).
According to a survey conducted by S&P Global Platts, analysts on average expect the EIA to report a 100,000-barrel
reduction in domestic crude oil supply for the week ended Oct.
22.
They also expect gasoline inventories to fall by 2.
7 million barrels and distillate inventories by 2 million barrels
this week.

On Tuesday (Oct.
26), November gasoline prices edged up 1 cent to $2.
517 a gallon on the New York Mercantile Exchange and November heating oil prices rose 0.
5 percent to $
2.
577 a gallon.
Natural gas prices fell 0.
3% to $
5.
882 per MMBtu in November.
The National Oceanic and Atmospheric Administration forecasts below-normal temperatures in much of the southeastern and Midwestern parts of the United States in the first week of November, rising nearly 12 percent
on Monday.