Geoffrey Smith 

Investing.com — Crude oil prices were little changed in early trading in New York on Tuesday, still well supported by tight spot markets, an ongoing energy crisis in China and a broad recovery in global demand.

Futures closed flat at $80.52 per barrel by 1030 ET (1530 GMT) and were 0.3% lower at $83.41 per barrel as of 10:30 AM ET.

U.S. gallon prices were 0.1% lower at $2.3765 per gallon

Prices appeared to be in a comfortable range, subject to new developments regarding the supply-demand balance. They may still have to wait, since U.S. inventory data will not be published by the American Petroleum Institute until Wednesday. This is due to the Columbus Day holiday. 

The U.S. Air Travel Industry rebound was apparent in this holiday weekend. Domestic passenger numbers are back to 20% in 2019 compared with their pre-Covid levels. However, things did not go as planned due to the disruptions at Southwest Airlines (NYSE:).

The news that Saudi Arabia will increase its shipments to Asian clients in November did not have a lasting effect on the market. The extra cargoes, while they will increase the country’s output in November, won’t be more than what it has received under the OPEC+ arrangement. Saudi Arabia, Kuwait, and Iraq all reduced official selling prices in November to protect market share. This is consistent with OPEC’s warning at the beginning of the month that underlying market demand might not be as strong, as suggested by the current global spot market. Others outside of the bloc see these arguments as an attempt at lowering prices to fill state coffers which have been hard hit by last year’s price collapse.

As it released its World Economic Outlook, the International Monetary Fund reduced its global growth forecast by 0.1% – 5.9% Tuesday. However, its projection for 2022 remains unchanged at 4.9%. This doesn’t mean that there will be any more decline in oil demand. 

Other parts of the market supported oil prices, and new flooding in China caused more production to stop at coal mines. The result was a rise in the cost for alternative fuels. The Chinese energy system has limited ability to convert from coal to crude oil in a short time. However, spot prices of liquefied natural gases are higher than ever, and these prices are supported by the U.S. gas hub. U.S. increased 0.6% to $5.3376, stabilizing partially after last week’s unresolved spike.