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Oil Holds Drop From Seven-Year High as Energy Crunch Fears Ease By Bloomberg

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© Reuters. As Energy Crunch Fears Exercise, Oil Prices Drop from Seven-Years High

(Bloomberg), Oil suffered losses in Asian trading, after stocks grew faster than expected. Russia was able to offer relief.

After a decline of almost 2% Wednesday, futures in New York dropped to $77 per barrel. The U.S. crude inventory increased by 2.35million barrels last Week, according to official data. That’s more than twice what the Bloomberg survey median estimates. Russian President Vladimir Putin claimed that records volumes of natural gasoline could be exported to Europe as Europe faces an energy shortage. After his comments, gas prices dropped.

Also see: Gas-to Oil Switching: An Trend to Influence Winter Crude Price

As a result of a European to Asian energy crisis, oil prices rose to their highest level since 2014. However, OPEC+ stated that it will only restore a small amount of supplies to the market for November. Saudi Aramco (SE: ) claimed that the gas crisis had already increased consumption. The Financial Times, however, reported that the U.S. was considering the release emergency oil reserves.

“High energy prices are mostly centered around supply-side issues and they do not look like they will persist beyond winter,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore. “Where prices are at right now, I think they look reasonable, but I still have my doubts about $100 oil.”

The Energy Information Administration data shows that gasoline inventories in the United States increased by around 3 million barrels per week while distillate inventories dropped by 396,000 barrels. Crude stocks at Cushing’s key storage facility in Oklahoma increased for the second week.

Exports from Russia’s Gazprom PJSC (OTC:) to Europe in the first nine months of the year were close to all-time highs, according to the company. Putin stated that if this pace continues for the remainder of 2021 it will be a record-breaking year.

©2021 Bloomberg L.P.

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