Oil holds gains, buoyed by hopes for ro­bust de­mand

OUT­LOOK En­ergy agency says daily de­mand to hit 1.6m bar­rels as re­searchers fore­cast slow­down in mar­ket sup­ply

Business Daily (Kenya) - - MONEY & MARKETS GLOBAL -

Oil prices eased yes­ter­day, but held on to most of their gains in the pre­vi­ous ses­sion when the mar­ket was buoyed by a fore­cast for firmer global oil de­mand by the In­ter­na­tional En­ergy Agency.

Lon­don Brent crude for Novem­ber de­liv­ery was down 18 cents, or 0.3 per cent, at $54.98 a bar­rel, af­ter ris­ing 1.6 per cent on Wed­nes­day.

NYMEX crude for Oc­to­ber de­liv­ery was down nine cents, or 0.2 per cent, at $49.21, af­ter a 2.2 per cent gain in the pre­vi­ous ses­sion.

Wed­nes­day’s gains came de­spite US gov­ern­ment data show­ing an­other big build in US crude in­ven­to­ries due to Hur­ri­cane Har­vey.

The In­ter­na­tional En­ergy Agency (IEA) raised its 2017 global oil de­mand growth estimate to 1.6 mil­lion bar­rels per day (bpd) from 1.5 mil­lion bpd.

The IEA said the global oil sur­plus is be­gin­ning to shrink due to stronger-thanex­pected Euro­pean and US de­mand growth, as well as pro­duc­tion de­clines in

Or­gan­i­sa­tion of Pe­tro­leum Ex­port­ing Coun­tries (Opec) and non-opec coun­tries.

The sup­ply side of the equa­tion is also look­ing promis­ing, Bar­clays Re­search said in a note.

“Un­rest in Iraq and Venezuela should keep out­put there in check, re­gional crude oil con­tan­gos have dis­si­pated, and stocks are grad­u­ally de­clin­ing,” it said.

That said, “A softer mar­ket bal­ance is in store for next year, which should en­sure an Opec/non-opec deal re­mains in place be­yond March 2018,” Bar­clays said.

The Opec and other pro­duc­ers, in­clud­ing Rus­sia, are re­duc­ing crude out­put by about 1.8 mil­lion bpd un­til next March in an at­tempt to sup­port prices.

US En­ergy In­for­ma­tion Ad­min­is­tra­tion (EIA) data showed a build in US crude in­ven­to­ries last week of 5.9 mil­lion bar­rels, ex­ceed­ing ex­pec­ta­tions.

US petrol stocks slumped by 8.4 mil­lion bar­rels, the largest weekly de­cline since data be­gan in 1990.

The coun­try’s petrol fu­tures

ex­tended de­clines on Thurs­day as de­mand is ex­pected to slip due to the ef­fects of Hur­ri­cane Irma on the high-con­sum­ing states of Florida and Ge­or­gia.

Dis­til­late stocks fell by 3.2 mil­lion bar­rels, the data showed.

Exxon­mo­bil Corp said on Wed­nes­day said it was restart­ing its 362,300-bar­relper-day Beau­mont, Texas, re­fin­ery for the first time since it was shut by Har­vey.

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