By Geoffrey Smith
Investing.com -- Crude oil prices came off fresh seven-year highs in early trading in New York on Monday but remained well supported by signs that key producers are struggling to raise output to meet world demand.
By 9:40 AM ET (1340 GMT), U.S. crude futures were up 1.2% at $82.66 a barrel, having earlier hit a high of $83.14, their highest since 2014. Brent futures, the global benchmark, were up 0.8% at $85.55 a barrel.
U.S. Gasoline RBOB Futures, meanwhile, were up 0.5% at a fresh seven-year high of $2.4990 a gallon.
Earlier, Bloomberg reported, citing unnamed sources close to the bloc, that the Organization of the Petroleum Exporting Countries produced an average of nearly 750,000 barrels a day below the ceiling under a deal with Russia and others in September. Sources attributed it to past problems of under-investment in Nigeria and Angola.
Separately, Kuwait, the fourth-biggest producer in OPEC after Saudi Arabia, Iraq and the United Arab Emirates, said that its sustainable output capacity had also fallen by an average of 227,000 barrels a day to 2.579 million barrels a day in its fiscal 2021 year.
The sight of OPEC producers struggling to meet output targets at a time when world demand is rising due to the easing of pandemic-related restrictions on mobility is aggravating an imbalance between supply and demand. Global inventories are already at their lowest in three years.
Overnight, Japan joined the list of net energy importers calling on OPEC and its allies to do more to keep a lid on prices. Japan is one of many countries fearing that high energy prices will kill the economic recovery – albeit there are more signs of that in places where natural gas and coal prices have forced utilities and energy-intensive companies to cut output.
However, there was some sign of relief on the demand side earlier, as China’s third-quarter gross domestic product data for the third quarter showed the world’s second-biggest economy – and its biggest oil importer – slowing more sharply than expected.
In particular, China’s independent refiners – known as ‘teapots’ – reduced their throughput to the lowest in 16 months as Covid-19-driven lockdowns depressed mobility and a creeping energy crisis stunted industrial demand.