Oil Gains After IEA Revises Data
By Alison Sider and Sarah McFarlane
Crude futures turned from losses to gains Friday, recovering from a selloff after the International Energy Agency revised its historical demand figures lower, indicating oil supplies might not be as tight as previously thought.
U.S. crude futures rose 23 cents, or 0.47%, to $48.82 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 20 cents, or 0.39%, to $52.10 a barrel on ICE Futures Europe.
Oil prices have been trading in a narrow range in recent days, and reversals on Thursday and Friday showed how little momentum prices have to move outside that, analysts said. On Thursday, the U.S. benchmark briefly topped $50 a barrel but then quickly reversed to end the day lower.
"It's a grind -- we're covering the same territory over and over again," said John Saucer, vice president of research and analysis at Mobius Risk Group. Still, he said stabilizing prices even despite some bearish indicators "show you how resilient the market is."
Prices ended the week down 1.53%, the second-consecutive week of declines.
"That $50 level just seems like a massive brick wall," said Tariq Zahir, managing member of Tyche Capital Advisors.
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.
Analysts at Simmons Co. International echoed that.
"The IEA's balances do not inspire confidence in meaningful inventory draws," they wrote in a note Friday.
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.
Gasoline futures rose 1.02 cents, or 0.64%, to $1.6130 a gallon. Diesel futures rose 0.33 cent, or 0.2%, to $1.6346 a gallon.
Jenny W. Hsu contributed to this article.