LONDON – Oil prices rose on Tuesday as tighter U.S. supplies helped to reverse days of losses triggered by concerns across global markets about the impact on China’s economy of a crisis at heavily-indebted property group China Evergrande.

Oil rallies on tight supplies in aftermath of U.S. storm-oil and gas 360

Source: Reuters

Brent crude gained 52 cents, or 0.7%, to $74.44 a barrel by 1338 GMT, having fallen by almost 2% on Monday.

The October West Texas Intermediate (WTI) contract, which expires later on Tuesday, was up 41 cents, or 0.6%, at $70.70, after dropping 2.3% in the previous session. The more active November contract gained 52 cents a barrel to $70.66.

ActivTrades analyst Ricardo Evangelista said concerns over U.S. production were pushing aside other factors, including uncertainty over the outcome of the Federal Reserve monetary policy committee meeting, which begins on Tuesday and “fears that the Evergrande issue may trigger a wider crisis”.

Royal Dutch Shell, the largest U.S. Gulf of Mexico oil producer, said on Monday that damage to offshore transfer facilities from last month’s Hurricane Ida will cut production into early next year.

About 18% of the U.S. Gulf’s oil and 27% of its natural gas production remained offline on Monday, more than three weeks after Hurricane Ida, regulator Bureau of Safety and Environmental Enforcement (BSEE) said.

Meanwhile, investors across financial assets have been rocked by the fallout from heavily indebted Evergrande and the threat of a wider market shakeout in the longer term. [MKTS/GLOB]

While that view of the state of China’s economy is weighing on markets, the U.S. Federal Reserve is also expected to start tightening monetary policy – which is likely to make investors more wary of riskier assets such as oil.

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