Brent crude turns lower as weaker demand view weighs

16 October, 2018, 07:27 | Author: Brooke Harris
  • Oil prices: IEA, OPEC weigh in with forecasts

"At the heart of the price malaise are concerns that oil demand will be adversely impacted by a myriad of downside risks facing the global economy".

Oil markets look "adequately supplied for now" after a big production increase in the last six months, but the industry is coming under strain, the West's energy watchdog said on Friday.

Brent for December settlement added 94 cents to $81.20 a barrel on the London-based ICE Futures Europe exchange.

As S&P Global Platts writes in an article "IEA cuts global oil demand growth estimates, says higher prices to persist", in its latest monthly oil market report, the IEA cut its estimates of global demand growth to 1.3 million b/d for this year and 1.4 million b/d next year, citing currency depreciations, trade disputes and a revision to its data on China.

Crude was still heading for its first weekly drop in five weeks, pressured by a big rise in USA inventories and fading concerns for now about looming US sanctions aimed at cutting Iran's oil exports.

Both contracts remained headed for the first weekly drop in five weeks, pressured by a big rise in US inventories and fading concerns about shrinking global supplies due to looming USA sanctions on Iran's oil exports.

The IEA warned that recent peaks in supply and demand have put a strain on spare capacity.

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US crude stocks rose last week as refineries cut output, while gasoline stocks increased and distillate inventories fell, the Energy Information Administration said on Thursday.

Now, with data showing Chinese exports to have registered a double digit growth in the month of September, despite escalating trade tensions with the US, concerns about demand growth have eased a bit. On Thursday, the Energy Information Administration reported a 6 million barrel increase in crude inventories from the previous week.

Oil stockpiles in the world's biggest economy are swelling amid International Energy Agency warnings about growing threats to global energy demand. OPEC, Russia and other United States shale producers had increased production since May, raising global oil output by 1.4 million barrels per day (bpd).

Prices for the USA oil benchmark edged higher Friday as investors assessed the next leg of a volatile stock market, but signs of rising crude supplies contributed to an overall weekly loss of 4%.

In fact, production has surged, led by the U.S. shale revolution, and supported by big increases in Brazil, Canada and elsewhere, according to the IEA.

The reductions continued as oil and gas companies moved more workers back to production platforms that were evacuated earlier in the week.

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