In one gloomy note for oil producers, the IEA trimmed its forecast for the rise in global oil demand next year, predicting that global economic growth would fall short of previous projections.
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Producers remain “cautious on outlook”, and further drilling increases this year may be “limited”, the IEA said in its monthly report.
Crude oil prices rose over 5 percent Thursday following comments from the Saudi Arabian Oil Minister and a report on demand forecasts from the International Energy Agency (IEA).
The IEA report also noted the “robust Middle East oil production” in July, led by Saudi Arabia which recorded its highest output ever.
As a result of lower demand growth and higher non-OPEC output, the IEA cut its call on OPEC crude for 2017 by 0.2 million bpd to 33.5 million bpd.
Oil prices dipped on Wednesday as a global supply overhang weighed on markets, while talk of a potential producer meeting to discuss propping up prices lent some support but was met with scepticism by analysts.
Global benchmark Brent crude futures were down 13 cents at $44.85 per barrel at 1216 GMT.
The API (American Petroleum Institute) estimated that United States crude oil inventories rose by 2.1 MMbbls between July 29, 2016, and August 5, 2016.
SINGAPORE – Oil prices fell early on Thursday as a build in U.S. crude inventories and record Saudi Arabian production weighed on markets.
Brent crude was trading at $46.12 per barrel and WTI at $43.7 per barrel, showing an increase of $0.8 and $2, respectively, from the last close.
US crude inventories are now at “historically high levels for this time of year”, the EIA said. That’s over a million barrels a day more than it produced on average in 2015 and 2 million more than in 2014.
North Sea Brent crude dropped by 50 cents to $43.55, while U.S. light crude traded at around $41.15 a barrel, down 56 cents, Reuters reported.
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The situation Wednesday was no different, with slight gains in morning trading erased after the U.S. Energy Information Administration reported a gain of 1.1 million barrels of crude oil in storage for the week ending August 5, the third straight week for an increase. In 2017, non-OPEC supply is expected to decline by 0.15 mln barrels daily, following a downward revision of 40,000 barrels a day.
