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Brent Oil Futures face the first loss of three sessions

On Monday, Oil futures took a divided route, with the global benchmark ending lower for the first time in three sessions and the US benchmark trimmed early gains significantly after both multiyear hit highs. According to one analyst, high crude prices increased the risk of demand destruction in the energy industry. Meanwhile, natural gas prices plummeted about 8% on Monday, as a prediction for milder weather eased concerns about winter energy supplies.

According to Phil Flynn, senior market analyst at The Price Futures Group, the Oil market is likely to witness an uptick in volatility due to recent multiyear highs in prices. According to MarketWatch, Oil production from the Organization of Petroleum Exporting Countries is lower than projected. Demand expectations are rising with the expected lifting of the travel ban for immunized visitors into the United States, and jet fuel demand should increase.

“On the flip side, we’re already seeing that the high prices of energy are slowing economies in places like China, so I think we do have to be on guard for signs of demand destruction — especially if prices continue their meteoric rise,” said Flynn. Chinese economic data indicated the world’s second-largest economy grew 4.9 percent year on year in July-September, down from 7.9 percent the previous quarter, due to a slowdown in construction activity and industrial production limitations due to energy shortages.

Oil prices will “continue to increase over the long run,” according to Flynn, “but don’t be shocked to see small pullbacks like this along the road.” On Monday, November, West Texas Intermediate crude CL.1, 0.44 percent CLX21, 0.44 percent added 16 cents, or 0.2 percent, to settle at $82.44 a barrel on the New York Mercantile Exchange, after trading as high as $83.87 — a peak was last seen in 2014.

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