Oil rises on expectation high natural gas to drive switch for heating

Reuters

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    * API shows U.S. crude stocks up, fuel stocks down for last
week
    * U.S. 2021 crude output seen falling more than forecast -
EIA
    * OPEC trims 2021 demand f'cast, but says gas price surge
may help

    By Yuka Obayashi
    TOKYO, Oct 14 (Reuters) - Oil prices rose on Thursday,
reversing previous losses, on expectations that high natural gas
prices as winter approaches may drive a switch to oil to meet
heating demand needs.
    Brent crude  LCOc1  futures gained 28 cents, or 0.3%, to
$83.46 a barrel at 0107 GMT after falling 0.3% on Wednesday.
    U.S. West Texas Intermediate (WTI) crude  CLc1  futures
climbed 22 cents, or 0.3%, to $80.66 a barrel, after dropping
0.3% the previous day.
    "Investors bet that surging gas prices will encourage power
generators to switch to oil as winter demand season is
approaching," said Hiroyuki Kikukawa, general manager of
research at Nissan Securities.
    Prices were also supported by concerns about supply
tightness after the U.S. Energy Information Administration (EIA)
said on Wednesday that crude oil output in the United States,
the world's biggest producer, is going to decline in 2021 more
than previously forecast thought it will bounce back in 2022.
 urn:newsml:reuters.com:*:nL1N2R91YZ
    "The current tightness in the crude market and near-term
outlook for seasonal demand increases lent support to investors'
sentiment, outweighing a bigger-than-expected build in the U.S.
crude inventories and weaker demand forecast by OPEC," Kikukawa
said. 
    The American Petroleum Institute (API) said late on
Wednesday that U.S. crude stockpiles rose by 5.2 million barrels
for the week ended Oct. 8, according to market sources who saw
the API data. 
    The API also reported gasoline inventories fell by 4.6
million barrels and distillate stocks fell by 2.7 million
barrels, the sources said.  urn:newsml:reuters.com:*:nN9N2NC03Y API/S 
    Analysts in a Reuters poll expected crude inventories to
rise by 700,000 barrels.  urn:newsml:reuters.com:*:nL4N2R83EU EIA/S 
    The Organization of the Petroleum Exporting Countries (OPEC)
trimmed its world oil demand growth forecast for 2021 in its
latest monthly report on Wednesday, while maintaining its 2022
view.
    However, the producer group said rising natural gas prices
could boost demand for oil products as end users switch fuels.
 urn:newsml:reuters.com:*:nL1N2R90SH
    The EIA will release its inventory report later on Thursday
at 11 a.m. EDT (1500 GMT).
   

 (Reporting by Yuka Obayashi; Editing by Christian Schmollinger)
 ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))

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