NEW YORK/LONDON: Crude oil prices were marginally higher yesterday, supported by worry over global supply disruptions but capped by an unexpected jump in oil inventories in the United States and a cut in estimates for oil demand growth.
Brent crude oil futures were trading 81 cents higher at $103.77 per barrel at 1.38pm EDT (1738 GMT), after trading as high as $104.10. The July Brent contract expires today.
US crude oil futures were trading 87 cents higher to $96.25.
The International Energy Agency (IEA) said modest economic growth was limiting oil demand worldwide and some developed economies would see absolute declines in oil consumption in 2013.
At the same time, production by the Organisation of the Petroleum Exporting Countries (Opec) was rising, outstripping demand for its oil, with big increases recently in output from Saudi Arabia, Iran and other Middle East Gulf producers.
“The IEA report seems fairly bearish overall,” said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. “It will do little to end the gloomy picture. Opec production is rising and running above its target, while demand for its oil is falling... The growth in global oil demand will continue to fall short of the increase in non-Opec supply.”
The IEA report follows similar assessments this week by Opec and by the US government’s Energy Information Administration (EIA). Both cut their global oil demand growth forecasts on Tuesday, while signalling ample supplies in most markets. Crude oil prices were drawing some strength from continued worries over supply disruptions in Libya and Sudan, among other oil producing nations, traders said.
Reuters
