Oil prices rose on Thursday, recouping earlier losses, thanks to expectations that higher natural gas prices with the approach of winter may lead a shift to oil to meet the demand for fuel for heating.
Brent crude futures rose 28 cents, or 0.3 percent, to $83.46 a barrel at 0107 GMT, after falling 0.3 percent on Wednesday, according to Reuters.
US West Texas crude contracts also rose 22 cents, or 0.3 percent, to $ 80.66 a barrel, after falling 0.3 percent the previous day.
“Investors are betting that higher gas prices will encourage power plants to switch to oil as the winter demand season approaches,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Prices were also supported by concerns about tight supplies after the US Energy Information Administration said on Wednesday that crude oil production in the United States, the world’s largest producer, will decline in 2021 more than previously expected before rising again in 2022.
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