Oil rises as IEA forecast overshadows U.S. crude build

14 September, 2017, 00:50 | Author: Ora Austin
  • Yuri Smityuk  TASS

But oil market watchers cannot ignore Pyongyang's increasingly aggressive stance for the impact it could have on oil demand - a crucial variable in rebalancing the markets.

While Florida and the rest of the Gulf Coast deal with the aftermath of Hurricane Harvey and Irma and the energy markets assess the short-term demand destruction, in the bigger picture for energy, we are getting very bullish data in supply versus demand.

The agency, which coordinates energy policies of industrial nations, raised its 2017 global oil demand growth estimate to 1.6 million barrels per day (bpd) from 1.5 million bpd. The U.S. Energy Information Administration lowered its forecast for total U.S. crude oil production, however. Gasoline and distillates stockpiles both fell.

Oversupply has kept a lid on oil prices which have hovered in a tight range of US$50-52 per barrel for Brent crude and US$47-49 per barrel for West Texas Intermediate crude. Stephen Brennock, analyst at brokerage PVM, said that OPEC was likely to fall short of its goal of reducing oil stocks to their five year average by the end of the first quarter of 2018, when the deal on production controls is set to expire.

Even so, USA crude stockpiles are likely to build in the next few weeks as refiners try to catch up with the backlog of oil stranded during the storms of the past two weeks, analysts said.

Gasoline stocks fell by 8.4 million barrels, compared with analysts' expectations in a Reuters poll for a 2.1 million-barrel drop.

Only Canadians with dealings in United States likely affected
Equifax's website said "System Currently Unavailable - Error 500" and suggested consumers try contacting the other credit bureaus. But really, we just have to take a moment and let our collective jaws hang open in abject stupefaction.

Oil rose as the International Energy Agency (IEA) forecast the strongest demand growth in two years, while the Organisation of Petroleum Exporting Countries (Opec) was said to discuss prolonging output cuts further into 2018.

The reduction could possibly contribute to larger-than-typical inventory draws for September, the EIA said. Prices traded at $48.74 before the supply data.

"Depending on the pace of recovery for the US refining industry post-Harvey, very soon OECD product stocks could fall to, or even below, the five-year level", it said referring to Hurricane Harvey which hit the United States two weeks ago.

Crude oil prices were higher early Wednesday after the IEA said the level of oil and petroleum products on the market could dip below the five-year average.

Irma has knocked out power to 4.5 million customers, paralyzed tanker traffic and shut about 6,000 gasoline stations.

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