US Oil Hits New 2016 High as IEA Sees Glut Easing

NEW YORK: Oil prices rose on Thursday (May 12), pushing US crude to a fresh 2016 high as the International Energy Agency predicted the crude oversupply would shrink in the second half of 2016.

In its monthly report, the agency predicted “solid” growth in oil demand this year, after stronger-than-expected demand in the first quarter, mainly driven by India.

Thought it kept its 2016 demand forecast unchanged at 95.9 million barrels per day, the Paris-based IEA said that was more likely to be revised higher than lower.

“We continue to trade on the idea this weak fundamental picture is going to change,” said Gene McGillian, an analyst at Tradition Energy. “The monthly report that came out from the IEA pointed toward a tightening picture with increasing demand.”

New York’s West Texas Intermediate for delivery in June rose 47 cents to US$46.70 a barrel on the New York Stock Exchange.

In London, Brent North Sea crude for July, the European benchmark, finished at US$48.08 a barrel, up 48 cents from Wednesday’s settlement.

The IEA report also noted a “dramatic increase” in Iran’s oil production in April to nearly 3.6 million barrels a day, a level last achieved in November 2011. Of that, two million barrels a day were exported.

Overall OPEC production was at 32.8 million barrels a day, the highest level since 2008.

Courtesy : channelnewsasia.com