Middle-east Arab News Opinion | Asharq Al-awsat

Oil Down 1 Percent after Surge | ASHARQ AL-AWSAT English Archive 2005 -2017
Select Page

TOKYO (Reuters) – Oil prices fell 1 percent on Friday as dealers took profits from the previous day’s surge, while the West’s energy watchdog said a tighter fourth quarter would follow the biggest third-quarter stockbuild in 15 years.

In its monthly oil market report, the International Energy Agency (IEA) left its forecast for oil demand growth next year unchanged at 1.45 million barrels per day (bpd), but said demand would rise by 2.4 million bpd in the fourth quarter of this year versus the third, 400,000 bpd more than it had expected.

It also said that inventories in OECD nations had risen at a rate of 1.15 million bpd during the course of the third quarter, the highest third-quarter build since 1991.

U.S. light, sweet crude for December deepened earlier losses to stand 56 cents lower at $60.60 a barrel by 0941 GMT, eroding nearly half of Thursday’s sharp gains. London Brent crude fell 61 cents to $60.71 a barrel.

Prices rallied to their highest in two weeks on Thursday, extending gains that followed an unexpectedly steep fall in U.S. fuel stocks and more talk of further supply cuts from OPEC.

U.S. weekly data showed a 2.7 million-barrel fall in distillate stocks, stirring concerns over heating fuel supplies as the northern hemisphere heads into winter.

Government and private forecasters project the U.S. Northeast, the biggest heating oil consuming region, will have either normal or colder-than-normal weather into January.

The IEA’s strong fourth-quarter demand outlook and steady 2007 view may assure bulls who had feared the Paris-based agency might again cut back demand forecasts due to higher prices.

But the hefty build in autumn inventories may also support OPEC’s view that crude oil markets are oversupplied.

Saudi Arabia and other Gulf OPEC members said this week they saw scope for further supply cuts when the producer group next meets on December 14, deepening the 1.2 million bpd reduction that took effect at the start of this month.

Gulf members of the Organization of the Petroleum Exporting Countries said on Wednesday they were fully committed to the 1.2 million barrels per day (bpd) cut agreed from November, but said markets remained oversupplied for now.