IEA sees world oil market 'adequately supplied'

Crude Oil

Crude Oil

In U.S. oil markets, a decline in commercial crude inventories provided WTI with stronger support than Brent.

U.S. West Texas Intermediate (WTI) crude futures were up 11 cents at $71.08 a barrel, after falling 3 percent in the previous session to the lowest since September 21.

Earlier this week, the International Monetary Fund slightly downgraded its projection for global growth for this year and next-at 3.7 percent, growth is now expected 0.2 percentage point lower than IMF's forecast from April this year.

Brent for December settlement added 94 cents to $81.20 a barrel on the London-based ICE Futures Europe exchange.

"The decline may deepen significantly ahead of US sanctions - and subsequently as final cargoes are delivered", said the IEA, which advises major oil consumers on energy policy.

Speaking on the sidelines of an event by Columbia University on Friday, Nephew expected that Iranian crude oil exports would be as much as 1.3 million barrels per day as of November 4.

"The demand outlook is hurt right now because of the situation with the United States and China in particular".

Still, the monthly report by the International Energy Agency (IEA) on Friday weighed. According to data from cargo tracking and intelligence company Kpler, China purchased 1.58 million barrels of heavy Canadian crude oil for loading in September, up by almost 50 percent compared to the 1.05 million barrels it imported from Canada in April.

"The bearish alarm bells are ringing for next year's oil balance as market players brace for the return of a supply surplus", said Stephen Brennock of oil broker PVM. Declining equities amid wider risk-off investor sentiment had pressured oil on Thursday.

In the U.S. Gulf of Mexico, producers had cut output by 40 percent on Thursday due to Hurricane Michael, even as some operators began returning crews to offshore platforms.

Michael crashed ashore Florida on Wednesday as the third most powerful hurricane to strike the US mainland, leaving seven people least.

"The increase in net production from key suppliers since May of approximately 1.4 million bpd, led by Saudi Arabia, and the fact that oil stocks built by 0.5 million bpd in 2Q18 and look likely to have done the same in 3Q18, lends weight to the argument that the oil market is adequately supplied for now", the IEA said.

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