Futures increased 0.2 per cent in NY, bringing the weekly gain to 4.3 per cent. Talks with oil producers in Algiers next month could include action to stabilize the market, Saudi Arabia’s energy minister said, according to Reuters.
Advertisement
The West Texas Intermediate (WTI) benchmark for U.S. crude futures rose $1.20 or 2.8% to close at $44.69 a barrel, the highest level on the New York Mercantile Exchange since July 21. October Brent crude LCOV6, +0.85% on London’s ICE Futures exchange rose $0.45, or 1%, to $46.49 a barrel.
Global oil demand is expected to grow by 1.2 million barrels a day next year, down from 1.4 million barrels a day in 2016, the International Energy Agency (IEA) said on Thursday.
Oil is heading for its biggest weekly advance since April amid speculation informal OPEC talks next month may lead to stabilization measures after prices tumbled into a bear market.
IEA said that increasing demand should help control stocks later this year. The supply side may also pressure middle distillates as stockpiles remain high across the world, especially in the OECD, where inventories are now around 80 million barrels higher than the latest five-year average, OPEC commented.
Saudi Arabia, Opec’s largest oil producer, pledged during the last Opec meeting in June that the kingdom would not flood the market with oil.
For next year, the IEA lowered its forecast for demand growth by 100,000 barrels per day, to 1.2 million bpd, which would represent a slowdown from this year’s forecast growth of 1.4 million bpd.
Oil demand is expected to slow next year as the global economic outlook has weakened, according to the International Energy Agency on Thursday.
“Bearish supply-side news also weighed on the market, with Saudi Arabia reporting a record 10.67 million barrels per day production in July”, it added.
On the other hand, oil oversupply, which has again been weighing on crude prices since June, will disappear in the latter part of 2016, the IEA said.
Advertisement
“As long as oil holds $40.00 we should be at the bottom”, Phil Flynn, senior energy analyst at Price Futures Group said. Against a basket of currencies, the dollar traded 0.3 percent lower.
