Oil holds gains, buoyed by hopes for robust demand
TOKYO: Oil prices eased on Thursday, 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 LCOc1 was down 18 cents, or 0.3 per cent, at $54.98 a barrel by 06:42 GMT, after rising 1.6 per cent on Wednesday.
NYMEX crude for October delivery CLc1 was down 9 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 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 strongerthan-expected European and US demand growth, as well as production declines in 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.