Oil prices fall, catching their breath after sustained rally

 
INA-sources
 
Oil prices edged down on Tuesday, taking a break after a sustained recovery driven by strong demand in the United States, the world’s largest consumer of oil and its products.
 
Brent crude fell 20 cents or 0.2% to $ 85.79 a barrel at 1:43 am GMT, after gaining 0.5% on Monday. US oil fell 21 cents or 0.3% to $ 83.55 a barrel, having ended unchanged from the previous session after testing new highs.
 
While China’s electricity and coal markets have cooled somewhat after government intervention, energy prices remain high around the world as temperatures drop with the onset of the northern winter.
 
“The forecast for a colder November sees energy traders brace for a very tight market that will be met (with) unprecedented demand this winter,” said Edward Moya, senior market analysts at OANDA , in a note.
 
“This oil market will remain tight and that should mean a headline or two away from $ 90 oil,” he added.
 
Goldman Sachs said Brent is expected to beat its year-end forecast by $ 90 a barrel. The bank estimated that switching to oil from gas could add 1 million barrels per day (bpd) to oil demand.
 
Gasoline and distillate consumption is back in line with five-year averages in the United States after more than a year of depressed demand.
 
The market will closely monitor US inventory levels this week. Crude oil inventories are expected to have risen by 1.7 million barrels last week, according to a Reuter’s poll of analysts. Inventories of gasoline and distillates are expected to decline, however.