Meanwhile, Saudi Arabia accuses "people" of depleting their emergency stocks: File Image/Pixabay
The fluctuation of analytical concerns between tight supplies and waning demand leaned towards the former on Tuesday, causing minimal gains for range-bound oil prices.
West Texas Intermediate for December delivery rose 74 cents to settle at $85.32 per barrel, and Brent for December settlement increased 26 cents to $93.52 per barrel after Goldman Sachs stated in a note to clients that as the deadline to ban Russian products approaches for many countries, markets face a structural shortfall of diesel that will have serious implications for inflation.
Goldman chief executive David Solomon also said he believes a U.S. recession is "most likely," while a recession could be occurring in Europe.
Prince Abdulaziz bin Salman, energy minister, Saudi Arabia
I think we, as Saudi Arabia, decided to be the maturer guys
The gloomy sentiment was stoked by Amrita Sen, co-founder and director of research at Energy Aspects, who warned that the New York region will be especially hard-pressed to replace Russian fuel.
Stacey Morris, head of energy research at VettaFi, remarked, "Until the market gets some direction from headlines or the inventory report, oil may just trade relatively flat."
Tamas Varga, an analyst at PVM Oil Associates, said that while trading has been range-bound (Tuesday was the fifth-straight session in which WTI hovered within a narrow $1.50 range), he didn't foresee any substantial price drop: "The argument that recession fears and demand destruction will be the dominant driving force in coming months might look valid but unless these concerns are confirmed by conspicuously weakening structure any downside price potential will likely remain restrained."
Meanwhile, Saudi Arabia on Tuesday rubbed salt into the wound it caused the global community by agreeing with the Organization of the Petroleum Exporting Countries (OPEC) to cut output by 2 million barrels per day (bpd).
The kingdom's energy minister prince Abdulaziz bin Salman said at the Future Investment Initiative conference in Riyadh that "People are depleting their emergency stocks" and using it "as a mechanism to manipulate markets.
"Losing emergency stocks may become painful in the months to come."
He added that there are "layers and layers of uncertainty" in both supply and demand and a "gloomier" outlook for next year, and that OPEC had taken the best course of action to "mitigate" that uncertainty: "I think we, as Saudi Arabia, decided to be the maturer guys."
The prince's remarks came on the heels of Fatih Birol, the head of the International Energy Agency, stating that tightening markets for liquefied natural gas (LNG) worldwide and supply cuts by major oil producers have put the world in the middle of "the first truly global energy crisis."
Capping Tuesday's gloom was market sources citing American Petroleum Institute figures that U.S. crude stocks rose by about 4.5 million barrels for the week ended Oct. 21; gasoline inventories fell by about 2.3 million barrels, while distillate stocks rose by about 600,000 barrels.