Oil stables as equities gain, but concern builds over supply
London (Reuters) : Oil prices were mostly steady on Thursday, supported by a lift in equity markets but kept back by the evidence demand will fall behind by supply this year.
According to the International Energy Agency (IEA), global oil requirement is expected to pick up this year but supply is growing at a breakneck pace which leads to a rise in inventories in the first four months of 2018.
The oil price has been in flow with stocks repeatedly for the past 99 trading days, the longest such stretch in two years.
European equity markets were propped by muscular earnings from several chief financial firms while U.S. stock index futures SPc1 pointed to a pickup on Wall Street afterwards.
OPEC (Organization of the Petroleum Exporting Countries) and several other non-OPEC producers led by Russia started cutting supply in January 2017 to rub out a global glut of crude that had built up since 2014.
The IEA and OPEC both reported a modest rise in global inventory levels in January. The IEA believes non-OPEC supply, led by the United States, will grow by 1.8 million bpd this year, while demand will grow by about 1.5 million bpd.
Singapore-based brokerage Phillip Futures in a note on Thursday told that, “Surging U.S. output levels will continue to undermine OPEC’s efforts for stronger oil prices.”
The OPEC cuts joint with growing U.S. output mean OPEC is bringing up the rear market share.