Adding to the selling was news the Organisation for Economic Development and Cooperation (OECD) had cut its growth outlook for the world economy for this year and next.
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The report is expected to show that oil stockpiles rose by 1.3 million barrels last week, according to a Bloomberg News survey.
On the NY Mercantile Exchange, December West Texas Intermediate crude CLZ5, +1.50% tacked on 44 cents, or 1%, to $44.30 a barrel. “It looks very bearish”, said Oystein Berentsen, managing director of crude oil at Strong Petrochemical in Singapore. Internationally traded Brent crude futures were at $44.10 a barrel, up four cents on their last settlement, but close to August lows.
“Instead, traders took a “glass half full” approach to the IEA’s report, focusing on oil demand growing at its fastest pace in five years and the prediction of slower non-OPEC output in 2016″.
According to oil majors, the global oil glut will likely continue for quite a few time and may further depress crude oil prices in the months to come.
Growth in global demand for crude is set to slow next year as the allure of cheap oil fades, the worldwide Energy Agency (IEA) said yesterday.
World oil prices rose on Friday, rebounding slightly from the previous day’s sharp losses, after the worldwide Energy Agency forecast sustained demand.
Separately, Reuters shipping data showed tankers with nearly 20 million barrels of Iraqi oil due to sail to the United States in November, almost 40 percent above the amount booked to arrive in October.
The executive director of IEA, Mr. FatihBirol stated that in the past 25 years, markets have not witnessed any decline in investments for two consecutive years.
Since oil prices began falling in June 2014, OPEC has followed a Saudi-led policy of keeping production high in order to defend market share against other producers such as Russian Federation and North America.
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“I expect no change the only interesting thing would be if they (OPEC) say anything about how to deal with additional supplies coming from Iran next year”, said Commerzbank’s Fritsch.
