Oil rises as IEA raises demand growth forecast for 2022

Oil pump cylinders are seen at the Vaca Muerta shale oil and gas field in the Patagonian province of Neuquen, Argentina January 21, 2019. REUTERS/Agustin Marcarian

LONDON, Aug 11 (Reuters) – Oil prices rose more than 1% on Thursday after the International Energy Agency raised its forecast for oil demand growth for this year, as oil prices soared gas pushing some consumers to turn to oil.

Brent crude futures gained $1.04, or 1.1%, to $98.44 a barrel at 0949 GMT, while US West Texas Intermediate crude futures rose by $1.03, or 1.1%, to $92.96.

“Natural gas and electricity prices have reached new highs, prompting a switch from gas to oil in some countries,” the Paris-based agency said in its monthly oil report, in which it noted its demand outlook for 2022 of 380,000 barrels per day. (bpd). Read more

An increase in oil inventories in the United States last week and the resumption of crude flows on a pipeline supplying central Europe, however, limited the rise in prices.

U.S. crude oil inventories rose 5.5 million barrels in the most recent week, the U.S. Energy Information Administration said, more than the expected increase in 73,000 barrels. Read more

Gasoline product supplied increased in the most recent week to 9.1 million barrels per day, although this figure still shows a 6% decline in demand over the past four weeks compared to the period of the previous year.

The premium for first-month WTI futures to loading barrels six months from now was set at $4.38 a barrel on Thursday, the lowest in four months, indicating an easing of tensions in rapid supplies .

The resumption of flows on the southern section of the Russia-Europe Druzhba gas pipeline further eased market concerns about global supply.

Russian state pipeline monopoly Transneft (TRNF_p.MM) has restarted oil flows through the southern branch of the Druzhba pipeline. Ukraine has suspended Russian pipeline flows to parts of central Europe since the start of this month because Western sanctions have prevented it from collecting transit fees from Moscow, Transneft said on Tuesday. Read more

Meanwhile, physical oil prices around the world began to decline along with futures, reflecting easing worries about supply disruptions from Russia and heightened worries about a possible global economic slowdown. Read more

Additional reporting by Muyu Xu in Singapore; edited by Kim Coghill and Jason Neely

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