Brent prices linger at $85/b mark as supply-demand fundamentals prevail

1140 GMT: Benchmark crude futures remained steady in Oct. 22 European trading after forecasts of a milder winter in the US, while undersupply concerns continued to support prices.

The ICE December Brent crude futures rose 81 cents/b from the previous settlement at $85.42/b as of 1140 GMT Oct. 22 while the NYMEX December WTI contract was up 70 cents/b at $83.20/b. This leaves crude prices at a similar level to last Friday.

The National Oceanic and Atmospheric Administration forecast Oct. 21 a milder winter across large parts of the US. Waning coal and gas prices also added to increased selling pressure to drag oil slightly lower in intraday trading. The coal market eased too following China's announcement of measures to combat the surging energy prices, which might slow the fuel switch to oil.

Still, structural undersupply prevailed and a global demand pick-up is expected to be the major driver for the oil market.

"The fact that the supply situation is still tight argues against any further price slide on the oil market," said Carsten Fritsch, commodity analyst at Commerzbank. That inventories are being drawn and OPEC+ countries are hesitant on increasing outputs should "keep Brent at the $85 per barrel mark for the remainder of the year," according to the same analyst.

In terms of market volatility, the CBOE OVX index, an indicator of crude oil price volatility, was higher on the day at 36.55%.

In currencies, the dollar was relatively stable against the euro, up 0.07% at $1.1639.