US consumption of both diesel fuel and heating oils has fallen recently.
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West Texas intermediate, the USA benchmark price for oil, gained 2.9 percent to start the trading day at $46.06 per barrel.
And the markets were gaining with crude Thursday as the Dow Jones Industrial Average was up 0.68% at 1 EDT, the S&P 500 climbed 0.45% and the Nasdaq rose 0.51%.
Global demand for oil will grow by 1.4 million barrels per day this year to 96.1 million barrels per day, the agency said in its monthly oil market report, revising upward last month’s forecast of a 1.3 million barrels per day rise.
“OPEC production is on the rise and we had a rather bearish weekly U.S. oil stats report.” .
The U.S. Energy Information Administration said that crude oil inventories fell by 2.5 million barrels last week to 521.8 million. This is the highest share since the late 1970s and “an eloquent reminder that even when US shale production does resume its growth, older producers will remain essential for oil markets”, the agency said.
Key crude benchmarks Brent and US West Texas Intermediate ost about 4 percent on Wednesday as a raft of bearish US inventory data heightened concerns about a global glut.
Inventories kept building in June, pushing oil in floating storage – one of the most expensive methods of storing oil – to its highest levels since 2009, the IEA said.
Overall, the IEA indicated there remained “an ominous investment gap building up in the oil industry that might, depending on how quickly today’s record high oil stocks are eroded, create the conditions for sharply higher prices over the medium term”.
The Middle East’s market share is at the highest level since the late 1970s as the US has seen a decrease in production. OPEC’s forecast of higher demand for its crude next year on fading surplus also supported the market sentiment.
The report gave no prediction for OPEC production but said that in June its total output rose from May by 264,000 bpd to 33.0 million bpd, according to secondary sources.
The American Petroleum Institute on Tuesday said US crude inventories rose by 2.2 million barrels in the week to July 8 to 523.1 million barrels, compared with analysts’ expectations for a decrease of 3 million barrels.
Crude had fallen to a two-month low on Monday amid a firm dollar and rise in the USA oil rig count.
However, the sharp drop provided dealers with an incentive to buy a low prices, while a rally in the dollar over the past week was pared, making it even cheaper for anyone holding other currencies.
In the US, crude production retreated by 220,000 barrels to 8.9 million a day in April, the most recent month for which comprehensive data is available, the IEA said. A higher count for United States oil drilling rigs and fewer bullish bets by hedge funds had also weighed on the market.
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Credit Suisse raised its 2016 oil price forecasts on Wednesday for USA crude, West Texas Intermediate, and Brent.
