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
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.