Oil prices surge on demand despite China reserves release

Oil prices settled higher on Monday as expectations of solid winter demand and a belief that a key producer group will not change the current production pace fast helped reverse initial losses caused by the release of fuel reserves by No. 1 world energy consumer China.

Brent crude futures settled up 99 cents, or 1.1 %, to $84.71 per barrel after hitting a session low of $83.03. U.S. WTI crude futures gained 84 cents, or 0.6%, to $84.05, having fallen to $82.74 earlier.

Crude oil prices are expected to hold near $80 as the year ends, as tight supplies and higher gas bills encourage a switch to crude for use as a power generation fuel.

Post-pandemic demand rebound as OPEC+ is sticking to gradual, monthly production increases of 400,000 barrels per day, despite calls for more oil from major consumers.