TOKYO Reuters - Oil prices edged lower on Tuesday, taking a breather from a sustained rally driven by strong demand in the United States, the world's biggest consumer of oil and its products.
Brent crude was down 20 cents or 0.2% at $85.79 a barrel by 0143 GMT, after gaining 0.5% on Monday. U.S. oil was down 21 cents or 0.3% at $83.55 a barrel, having finished unchanged in the previous session after testing new highs.
While China's red-hot power and coal markets have cooled somewhat after government intervention, energy prices remain elevated worldwide as temperatures fall with the onset of the northern winter.
Forecasts for a colder November have energy traders bracing for a very tight market that will be met with unprecedented demand this winter, OANDA senior market analysts Edward Moya said in a note.
This oil market will remain tight and that should mean a headline or two away from $90 oil, he added.
Goldman Sachs said Brent is likely to push above its year-end forecast of $90 a barrel. The bank estimated that switching to oil from gas could 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.