By Aaron Sheldrick
TOKYO (Reuters) – Oil prices rose on Tuesday as analysts pointed to signs of tightening U.S. supply, ending days of losses as global markets remain haunted by the potential impact on the Chinese economy from a crisis of the heavily indebted real estate group China Evergrande.
Brent crude rose 63 cents or 0.9% to $ 74.55 a barrel at 3:40 a.m. GMT, after falling nearly 2% on Monday. The contract for West Texas Intermediate (WTI), which expires later Tuesday, rose 69 cents or 1% to $ 70.98 after falling 2.3% in the previous session.
Global utilities are turning to fuel oil due to rising gas and coal prices and persistent blackouts in the Gulf of Mexico after Hurricane Ada, implying a decrease in supply, analysts said. from ANZ.
“While slowing Chinese economic growth and uncertainty over the (US) Fed’s cut schedule weighed on market sentiment, other developments still point to higher oil prices,” ANZ said Research in a note.
Yet investors of all financial assets have been rocked by the fallout from heavily indebted Evergrande and the threat of a larger, longer-term market upheaval. [MKTS/GLOB]
“The woes of Evergrande threaten the prospects for the world’s second-largest economy and have some investors questioning China’s growth prospects and whether it is safe to invest there,” said Edward Moya, analyst at main market at OANDA.
As this view of the state of the Chinese economy weighs on the markets, the US Federal Reserve is also expected to start tightening monetary policy – likely to make investors more wary of riskier assets such as the oil.
(Reporting by Aaron Sheldrick, editing by Kenneth Maxwell)