Oil prices ticked higher on Wednesday after the International Energy Agency said the global oil surplus was starting to shrink due to robust global demand and an output drop from OPEC and other producers.
U.S. West Texas Intermediate (WTI) CLc1 was up 11 cents, or 0.2 percent, at $48.34 a barrel at 0944 GMT after dropping earlier in the day.
International benchmark Brent crude LCOc1 was up 13 cents, or 0.2 percent, at $54.40 a barrel.
“Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly,” the IEA, which coordinates energy policies in industrialised nations, said in its monthly report.
“Demand growth continues to be stronger than expected, particularly in Europe and the U.S.,” the IEA said, raising its 2017 global oil demand growth estimate to 1.6 million barrels per day from 1.5 million bpd.
The assessment echoed a publication by the Organization of Petroleum Exporting Countries, which on Tuesday forecast higher demand for its oil in 2018 and pointed to signs of a tighter global market.
But Wednesday’s price gains were capped by reports of rising U.S. crude inventories.
Industry group the American Petroleum Institute reported late on Tuesday that U.S. crude stockpiles rose nearly twice the expected levels last week. Refineries cut output after Hurricane Harvey, while gasoline and distillate inventories fell. [API/S]
Analysts say U.S. stocks data may not give a full picture in coming weeks because of two major hurricanes – Harvey and Irma.
Crude inventories rose by 6.2 million barrels in the week to Sept. 8 to 468.8 million, nearly double analysts’ expectations for an increase of 3.2 million barrels.
The U.S. Department of Energy’s Energy Information Administration (EIA) reports on stockpiles and refinery is published later on Wednesday. [EIA/S]
The EIA also said on Tuesday it had revised both its 2017 and 2018 oil production forecast figures lower to reflect, in part, the effects of Hurricane Harvey.