The IEA said refineries will process record volumes of crude this summer, drawing down those stocks and helping ease the remaining gluts in products and inventories-potentially raising prices.
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U.S. West Texas Intermediate (WTI) crude futures were at Dollars 43.71 a barrel, up 22 cents, or 0.51 percent, from their last close.
Brent futures traded at $44.92 a barrel on the ICE Futures Europe exchange at 12:09 p.m.in London, having sunk to $41.51 on August 2, the lowest intraday price since April 18. Crude processing, or throughput, sank by 480,000 a day between April and June amid a glut of fuels like gasoline churned out earlier in the year while refiners took advantage of cheap oil prices.
The prevision goes against the recent forecast by the Organisation of Petroleum Exporting Countries (OPEC) reported earlier today.
At the same time oil oversupply, which has again been weighing on the oil price since June, will disappear in the latter part of 2016, the IEA said.
In its closely watched monthly oil market report, the Paris-based energy watchdog said it expects global oil demand to grow by 1.2 million barrels a day in 2017, a decrease of 100,000 barrels a day compared with last month’s forecast and down by 200,000 barrels a day from this year.
Global demand growth is expected to decline from 1.4 million bpd in 2016 to 1.2 million bpd in 2017, the IEA said, after a revision to the global economic outlook.
Meanwhile, increasing supply is keeping pressure on crude prices, which have fallen sharply in the past month.
The agency also notes that the supply overhang focus now shifted from raw to refined products. Preliminary data indicates that global oil supply increased by 240 tb/d in July to average 95.14 mb/d.
The surge in oil prices (and good results from leading USA retailers) saw Wall Street rise, helped the futures market on the ASX200 to a 33 point gain, and left the Aussie dollar around 77 United States cents this morning.
Market intelligence firm Genscape also reported a draw of about 271,000 barrels at the Cushing, Oklahoma delivery hub for WTI futures in the week to Aug 9, traders said.
Last month, OPEC’s output went up by 150,000 b/d to 33.39 million b/d, as Saudi Arabia – the group’s biggest producer – increased production to all-time highs and Iraq pumped more, with total OPEC output at an eight-year high, the IEA noted.
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A meeting of OPEC nations has yet to result in production cuts, even when prices fell below $30 a barrel.
