Oil Falls After IEA Data Casts Shadow
By Sarah McFarlane and Jenny W. Hsu
Crude futures eased further Friday after the International Energy Agency revised its historical demand figures lower, indicating oil supplies might not be as tight as previously thought.
Brent crude, the global oil benchmark, fell 0.9% to $51.44 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures fell 1% to $48.13 a barrel.
In its monthly report published Friday, the IEA said revisions to 2015 data saw it cut its global oil demand estimate by 330,000 barrels a day for 2015-2018. However, it said demand growth in 2017 was beating previous expectations.
"The main change is the historical revisions to past demand in non-OECD [countries], which makes the oil market less tight than the IEA expected before, although the demand increase in the second quarter was quite strong," Giovanni Staunovo, commodity analyst at UBS Group AG, said.
Also weighing on the market was the Organization of the Petroleum Exporting Countries report from Thursday, which said the cartel's July production rose 0.5% from June to 32.9 million barrels a day. That was mostly due to Libya and Nigeria, the two suppliers exempt from the production-curtailment pact. The cartel implemented production cuts starting January, with the aim of reducing global stocks.
The IEA said stockpiles in Organization for Economic Cooperation and Development countries fell by around 0.2 million barrels a day in the second quarter of 2017, but remained 219 million barrels above the five-year average.
It noted that OPEC members' compliance with the agreed cuts had slipped to 75%.
"If you assume that this July OPEC production figure will be maintained throughout the year, it means there will be no rebalancing in the second half of the year--global stocks would actually build by 40,000 barrels per day," said Tamas Varga, analyst at brokerage PVM.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--fell 0.5% to $1.59 a gallon. ICE gasoil changed hands at $477.50 a metric ton, down $9.00 from the previous settlement.