“The resulting product stock draw will increase refiners’ appetite for crude oil and help pave the way to a sustained tightening of the crude oil balance”, the IEA added.
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LONDON (AP) – The International Energy Agency expects global demand for oil to grow less than previously expected next year due to a weaker economy. REUTERS/CARLOS JASSOOil fell on Wednesday, hit by improved prospects for US output and a glut in refined products, while analysts largely expected no impact on supplies from talk of a potential producer meeting to discuss propping up prices.
Brent crude settled the session down US41 cents, or nearly one per cent, at $US44.98 a barrel.
Benchmark North Sea Brent crude futures recovered strongly from January’s 12-year low to double by June to above US$52 per barrel, but dropped 19 per cent the following month to below $42 per barrel.
US crude stockpiles probably fell by 1.5 million barrels last week, according to the median estimate in a Bloomberg survey before an Energy Information Administration report on Wednesday.
The price of crude oil made a significant rally between on Monday evening and Tuesday morning, as it rose above $45 per barrel when the president of the Organization of Petroleum Exporting Countries (OPEC) assured the market of a rise in September.
Oil’s recovery from the 12-year lows reached in January sputtered out in early June amid plentiful stockpiles, faltering demand growth and signs that US explorers could resume drilling.
July’s output has, however, remained unchanged from the month before and stood at 10.85 million barrels per day, according to preliminary data cited by the agency.
Oil has fluctuated since closing in a bear market last week.
Hedge funds almost doubled their bets against West Texas Intermediate crude oil over the last month as prices fell from their June highs in the low $50s, according to data compiled by Bloomberg. But he also noted that Opec oil ministers would meet informally on the sidelines of a gathering in Algeria next month.
Moreover, Saudi Arabia reported a new record high 10.67 million bpd in its crude oil production in July, weighing negatively on the overall sentiment, as traders continue to speculate there might be another OPEC meeting where the cartel could agree on output freeze.
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Meanwhile, top oil exporter Saudi Arabia boosted its oil output to a record high in July, it told Opec (Organisation of the Petroleum Exporting Countries).
