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Crude Oil Mixed After IEA Report

February 13, 2018 at 19:46 by Vladimir Vyun

Futures for crude oil were mixed today as West Texas Intermediate crude oil dropped, while Brent grade gained. The International Energy Agency raised its growth forecast for global demand in 2018 to 1.4 million barrels per day from the previous forecast of 1.3 million. It seemed that the Organization of Petroleum Exporting Countries and its allies were successful in achieving the goal of reducing global glut. Yet that may not necessarily be extremely helpful to oil prices as the IEA said:

With the surplus having shrunk so dramatically, the success of the output agreement might be close to hand. This, however, is not necessarily the case: oil price rises have come to a halt and gone into reverse, and, according to our supply/demand balance, so might the decline in oil stocks, at least in the early part of this year.

The agency explained that by rising supply from the United States:

The main factor is US oil production. In just three months to November, crude output increased by a colossal 846 kb/d, and will soon overtake that of Saudi Arabia. By the end of this year, it might also overtake Russia to become the global leader.

Today’s report from the IEA followed yesterday’s OPEC report that predicted world oil demand growth of 1.59 million per day this year. That represented an increase by 60,000 from the previous estimate.

March contract for delivery of WTI crude oil fell 0.13% to $59.21 per barrel as of 19:38 GMT on NYMEX today. At the same time, April contract for Brent crude gained 0.21% to $62.72 per barrel on ICE.

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