Oil prices edged lower on Tuesday after rising earlier in the day as prices were set to sustain a rally driven by strong demand in the United States, the world’s biggest consumer of oil and its products.
Brent crude was down 5 cents at $85.94 a barrel after gaining 0.5% on Monday.
Meanwhile, U.S. oil dropped 12 cents to $83.64 a barrel, having finished unchanged the previous session after testing new highs.
However, China’s red-hot power and coal markets have cooled somewhat after government intervention and energy prices remain elevated worldwide as temperatures fall with the onset of the northern winter.
Goldman Sachs said Brent was likely to push above its year-end forecast of $90 a barrel. The bank estimated switching to oil from gas may 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 be closely watching U.S. inventory levels this week. Crude oil stockpiles are forecast to have risen by 1.7 million barrels last week.