Oil prices steadied after whipsawing in a volatile session on Tuesday, as traders weighed the effect that higher energy costs could have on the global economic recovery.
Brent crude settled 23 cents lower at $83.42 per barrel. It earlier hit a high of $84.23 a barrel and a low of $82.72 a barrel. On Monday it hit $84.60, its highest since October 2018.
U.S. oil futures settled 12 cents higher at $80.64 per barrel, after ranging between $81.62 and $79.47.
Authorities from Beijing to Delhi scrambled to fill a yawning power supply gap on Tuesday, roiling global stock and bond markets on worries that rising energy costs will stoke inflation.
Power prices have surged to record highs in recent weeks, driven by shortages in Asia and Europe, with an energy crisis in China expected to last through year end, crimping growth in the world's second-largest economy and top exporter.
In London and southeast England, a tenth of fuel stations remained dry panic fuel buying last month, the Petrol Retailers Association said.
"People are starting to realize that the risk of higher energy prices could derail growth," said Phil Flynn, an analyst at Price Futures Group in Chicago. "Is energy demand a good thing or a bad thing?"
Persistent supply chain disruptions and inflation pressures are constraining the global economic recovery from the pandemic, the International Monetary Fund said as it cut growth outlooks for the United States and other industrial powers.
In its World Economic Outlook, the IMF trimmed its 2021 global growth forecast to 5.9% from the 6.0% forecast it made in July. It left a 2022 global growth forecast unchanged at 4.9%.
Even as demand grows, the Organization of the Petroleum Exporting Countries and allied producers, known as OPEC+, are sticking to plans to restore output gradually rather than quickly.
The price of Brent has surged by more than 60% this year. As well as OPEC+ supply restraint, the rally has been spurred by record European gas prices, which have encouraged a switch to oil for power generation in some places.
European gas at the Dutch TTF hub stood at a crude oil equivalent of about $169 a barrel, based on the relative value of the same amount of energy from each source, Reuters calculations based on Eikon data showed.