Oil prices rise as IEA sees higher demand
LONDON : Oil prices rose on Wednesday after the International Energy Agency (IEA) said a global surplus of crude was starting to shrink due to robust global demand and an output drop from OPEC and other producers.
By 1201 GMT, international benchmark Brent crude LCOc1 was up 47 cents, or 0.8 percent, at $54.74 a barrel. U.S. West Texas Intermediate (WTI) CLc1 was up 47 cents, or 0.9 percent, at $48.70 a barrel.
Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly, the IEA, which coordinates energy policies in industrialized nations, said in its monthly report.
The IEA said demand growth continues to be stronger than expected, particularly in Europe and the U.S. raising its 2017 global oil demand growth estimate to 1.6 million barrels per day from 1.5 million bpd.
The assessment echoed a report by the Organization of the Petroleum Exporting Countries forecasting higher demand for its oil in 2018 and pointing to signs of a tighter global market.
The U.S. Energy Information Administration (EIA) revised its 2017 and 2018 U.S. oil output forecasts lower to reflect, in part, the effects of Hurricane Harvey.
Currently, OPEC member states Libya and Nigeria have not agreed to production cuts. Some worries about rising U.S. crude inventories also persisted.
Source : Reuters