(Updates with settlement prices, adds commentary)
By Laura Sanicola
NEW YORK, Nov 15 (Reuters) - Oil prices settled mixed on
Monday as investors wondered whether crude supplies will
increase and whether demand will be pressured by the recent
surge in energy costs, the strong dollar and rising COVID-19
cases.
Brent futures settled down 12 cents, or 0.2%, to
$82.05 a barrel while U.S. West Texas Intermediate (WTI) crude
rose 8 cents, or 0.1%, to $80.88.
In early trading, the oil market factored in speculation
that President Joe Biden's administration could fight high
prices by releasing crude oil from the U.S. Strategic Petroleum
Reserve, but skepticism about that approach caused U.S. crude to
edge higher, according to John Kilduff, partner at Again Capital
LLC in New York.
"The market appears to have priced in too aggressively that
the SPR release would happen," Kilduff said.
Weighing on oil prices, the U.S. dollar hit a
16-month high against a basket of currencies as investors
worried about the global economy.
A stronger dollar makes oil more expensive for buyers using
other currencies.
Last week, U.S. energy firms added oil and natural gas rigs
for a third week in a row, encouraged by a 65% increase in U.S.
crude prices so far this year.
U.S. shale production in December is expected to reach
prepandemic levels of 8.68 million barrels a day, according to
Rystad Energy. Meanwhile there are indications demand may be
slowing due to heightened coronavirus cases and inflation.
The Organization of the Petroleum Exporting Countries (OPEC)
last week cut its world oil demand forecast for the fourth
quarter by 330,000 bpd from last month's forecast, as high
energy prices hampered economic recovery from the COVID-19
pandemic.
"The market now seems to be less concerned about the current
supply tightness, expecting it to be short-lived," Rystad senior
markets analyst Louise Dickson said. "Traders are instead
refocusing on the return of two bearish factors – the
possibility of more oil supply sources and more COVID-19 cases."
UAE Energy Minister Suhail al-Mazrouei said all indications
point to an oil supply surplus in the first quarter of 2022.
"There's little chance of OPEC+ raising output faster,
especially if ... the group expects the market to return to
surplus in the first quarter of 2022," said Craig Erlam, senior
markets analyst at OANDA.
Europe has again become the epicenter of the COVID-19
pandemic, prompting some governments to consider re-imposing
lockdowns, while China is battling the spread of its biggest
outbreak caused by the Delta variant.
Royal Dutch Shell PLC said it would scrap its dual
share structure and move its head office to Britain from the
Netherlands.
(Additional reporting by Noah Browning, Naveen Thukral, Roslan
Khasawneh and Scott DiSavino; Editing by Maju Samuel, Steve
Orlofsky and David Gregorio)