Oil steady after IEA lowers demand forecast, U.S. stocks
fall
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[August 13, 2020] By
Bozorgmehr Sharafedin
LONDON (Reuters) - Oil prices held steady
on Thursday after the International Energy Agency lowered its 2020 oil
demand forecast following unprecedented travel restrictions and data
showing a decline in U.S. inventories provided some support.
Brent crude <LCOc1> fell 12 cents, or 0.3%, to $45.31 a barrel by 1027
GMT, and West Texas Intermediate (WTI) <CLc1> was down 7 cents, or 0.2%,
to $42.60 a barrel.
"The oil market enjoys some calm summer weeks, seemingly taking a break
from the turbulent times earlier this year," said Norbert Rücker,
analyst Swiss bank Julius Baer.
The International Energy Agency cut its 2020 oil demand forecast on
Thursday and said reduced air travel because of the COVID-19 pandemic
would lower global oil consumption this year by 8.1 million barrels per
day (bpd).
The Organization of the Petroleum Exporting Countries (OPEC) also said
on Wednesday that world oil demand will fall by 9.06 million bpd this
year, more than the 8.95 million bpd decline expected a month ago.
Russian Energy Minister Alexander Novak said on Thursday he did not
expect any hasty decisions on output cuts when a monitoring committee of
OPEC and its allies, known as OPEC+, meets next week as the oil market
has been stable.
Last month OPEC+ eased the cuts to around to 7.7 million bpd until
December from a previous reduction of 9.7 million bpd, reflecting a
gradual improvement in global oil demand.
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The sun sets behind a crude oil pump jack on a drill pad in the
Permian Basin in Loving County, Texas, U.S. November 24, 2019.
REUTERS/Angus Mordant
Prices found some support as U.S. crude oil, gasoline and distillate inventories
dropped last week as refiners ramped up production and demand improved, a
government report showed. [EIA/S]
Oil prices have been range-bound since mid-June with Brent trading between $40
and $46 per barrel, and WTI between $37 and $43.
"The market moved from chronic oversupply in April-May to a deficit by June,"
said Ehsan Khoman, head of MENA research and strategy at MUFG. "The underlying
oil market deficit is becoming more evident and, along with a broader reflation
narrative, is keeping oil prices on an even keel."
Markets are still awaiting a breakthrough on a U.S. stimulus package and keeping
watch on frayed U.S.-China ties ahead of trade talks on Aug. 15.
Graphic: Demand/supply balance
https://fingfx.thomsonreuters.com/
gfx/mkt/xklvydwbrpg/dsbalance2020.JPG
Graphic: Global Oil Supply
https://fingfx.thomsonreuters.com/
gfx/mkt/jbyprkyeeve/oilsupply.JPG
(Reporting by Bozorgmehr Sharafedin in London, Additional reporting by Aaron
Sheldrick in Tokyo; editing by Barbara Lewis and Emelia Sithole-Matarise)
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