IEA increases forecast for world oil demand in 2017

International Energy Agency has increased its growth estimate for the year to 1.6 million barrels per day

International Energy Agency has increased its growth estimate for the year to 1.6 million barrels per day

OPEC output fell in August for the first time in five months, after turmoil in Libya disrupted flows and other member countries reduced production.

Global oil demand will climb this year by the most since 2015, the International Energy Agency said, amid stronger-than-expected consumption in Europe and the U.S. The IEA, which advises most major economies on energy policy, increased its estimate for demand growth in 2017 by 100,000 barrels a day to 1.6 million a day, or 1.7 percent.

Global oil commercial stocks remained unchanged in July 2017 at 3.016 bln barrels versus June.

"The first decline in four months cut supply to 97.7 million b/d".

"Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly", the agency said.

Stockpiles of refined fuels in developed nations were close to their five-year average in July, and could fall to or below this level "very soon", according to the IEA.

The 12 members of OPEC bound by a supply-cutting pact raised their compliance to 82 percent in August from 75 percent in July.

The IEA also said the impact from Hurricane Harvey on USA oil markets in the Gulf Coast was easing and its impact on global markets was likely to be relatively short-lived, although it would possibly help inventories rebalance more quickly. Consequently, our estimated demand growth for 2017 has been increased to 1.6 mb/d.

The U.S. Department of Energy's Energy Information Administration (EIA) reports on stockpiles and refinery runs later on Wednesday. In 2018, world oil demand is anticipated to grow by 1.35 mb/d, an increase of 70 tb/d from the previous report.

"Non-OPEC oil supply is expected to grow by 0.78 mb/d in 2017, unchanged from the last month due to offsetting revisions in Kazakhstan and U.S. supply".

The difference between Brent and WTI, known as the spread, rose by 11 cents to $5.41 in the favour of the global benchmark, as Hurricanes Harvey and Irma continued to impact demand for both crude and oil products in the U.S.

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