Oil price rises as IEA forecast overshadows USA crude build

Oil price rises as IEA forecast overshadows USA crude build

Oil price rises as IEA forecast overshadows USA crude build

Barkindo said the drop in global oil prices was the sharpest ever experienced.

Oil prices rose on Tuesday after OPEC forecast higher demand in 2018 and Russian Federation and Venezuela confirmed their commitment to a production - cutting deal to reduce the global crude glut.

United States gasoline prices, however, fell despite a record drawdown in inventories of the motor fuel.

"The American Petroleum Institute said that crude stockpiles in the U.S. increased by 6.2 million barrels in the week ending 8 September to 468.8 million".

The IEA report has raised its 2017 oil demand growth estimates to 1.6 million barrels per day (bpd) from 1.5 million bpd.

The meeting with del Pino also touched on the recent natural disasters in the USA which had an effect on global crude markets, added Minister Al-Marzouq.

Oil supply from outside of OPEC is expected to grow by 780,000 b/d in 2017, unchanged from last month's report, to 57.8 million b/d.

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Meanwhile, the International Energy Agency said in its latest monthly report that the global market is starting to tighten due to robust demand and a drop in output from both the OPEC and other producers.

Momentum building behind the notion that demand for oil is rising and stockpiles are falling resulted in West Texas Intermediate on Wednesday rising $1.07 to settle at $49.30 per barrel and Brent to climb 89 cents to $55.16. Distillate stocks fell 3.2 million barrels. This weekly drop in inventories was smaller than the drop that occurred following a previous outage of the Colonial Pipeline in September 2016, when Lower Atlantic gasoline inventories fell by almost 6 million barrels.

The numbers show that "Hurricane Harvey's disruptive influence continues", said Smith, director of commodity research at ClipperData.

The reports from the IEA and OPEC offset concerns over the EIA stockpile build, supporting prices.

USA gasoline futures RBc1 dipped after the data, and were down 0.8 percent at $1.6429 a gallon.

Another issue discussed in the meeting, he added, was the possibility of extending an agreement between the OPEC (Organization of the Petroleum Exporting Countries) members to reduce oil output by June 2018. Texas, where Harvey made landfall, represents 31% of all US refinery capacity, based on data from January 2017.

"The market is reacting in anticipation of refineries restarting at the same time expecting a decline in demand due to the after effects of Hurricanes Harvey and Irma", said Andrew Lipow of Lipow Oil Associates in Houston.

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