* Brent touches highest since 2018, WTI highest since July
* As OPEC reopens taps, African giants struggle to pump more
* China faces power shortages, hitting factory output
(New throughout, updates prices and market activity, adds
comment from Rystad Energy)
By Ahmad Ghaddar
LONDON, Sept 28 (Reuters) - Brent oil dipped on Tuesday
after topping $80 per barrel for the first time in nearly three
years, as the rally ran out of steam when power shortages in
China whit factory output.
Brent dipped $1.15, or 1.5%, to $78.38 a barrel at
11:17 a.m. EDT (1517 GMT), after reaching the highest since
October 2018 at $80.75.
U.S. West Texas Intermediate (WTI) crude lost $1.03,
or 1.4%, to $74.42 a barrel, after hitting a session high of
$76.67, its highest since July.
Prices face headwinds from a power crunch in China, the
world's biggest energy consumer.
"Recent power rationing to industries in China to drive down
emissions could weigh on economic activity, potentially
offsetting the tailwind from incremental diesel use in power
generation," investment bank Barclays said.
Profit-taking at session highs also pressured Brent, and
some investors worried that contagion from a Chinese housing
bubble could hit the country's economy and oil demand, said
Louise Dickson, senior oil markets analyst at Rystad Energy.
Still, Dickson said Brent's scaling $80 highlights how
growing fuel demand and worries about tight supply have become
the market's new theme, a reversal from earlier in the pandemic
when demand crashed.
Hurricanes Ida and Nicholas, which swept through the U.S.
Gulf of Mexico in August and September, damaged platforms,
pipelines and processing hubs, shutting most offshore production
for weeks.
Top African oil exporters Nigeria and Angola will struggle
until at least next year to boost output to quotas set by the
Organization of the Petroleum Exporting Countries (OPEC),
sources at their respective oil firms said, citing
underinvestment and maintenance problems.
Several other members of the OPEC+ group of producers, which
cut output during the pandemic, have also been having trouble
ramping up to meet recovering demand.
"Oil markets are accelerating, as a persistent supply
deficit is shrinking the inventory cover to the lowest level in
decades," Barclays said in a note.
The bank raised its 2022 Brent price forecast to £77 a
barrel, pegging WTI at $74.
Morgan Stanley sees Brent trading at $77.5 a barrel in the
third quarter under a base case and at $85 in a bull case.
India, the world's third-biggest oil importer, signalled
that a spike in oil prices would speed up the transition to
alternative energy sources.
Oil demand will grow sharply in the next few years as
economies recover from the pandemic, OPEC forecast on Tuesday,
adding that the world needed to keep investing in production to
avert a crunch despite an energy transition.
(Additional reporting by Rod Nickel in Winnipeg and Yuka
Obayashi in Tokyo; Editing by Jason Neely, Edmund Blair and
David Gregorio)
Barclays (BARC)
