Oil steady after energy agency increases demand growth forecast
The International Energy Agency has raised its demand growth forecast for 2022 as consumers favour oil over gas
London — Oil prices steadied on Thursday after the International Energy Agency (IEA) raised its oil demand growth forecast for 2022 as soaring gas prices drive some consumers to switch to oil.
Brent crude futures slipped 7c, or 0.1%, to $97.33 a barrel by 8.29am GMT, while US West Texas Intermediate (WTI) crude futures eased 9c, or 0.1%, to $91.84.
“Natural gas and electricity prices have soared to new records, incentivising gas-to-oil switching in some countries,” the Paris-based agency said in its monthly oil report, in which it raised its outlook for 2022 demand by 380,000 barrels a day (bbl/day).
A rise in US oil inventories last week and the resumption of crude flows on a pipeline supplying Central Europe capped further price gains, however.
US crude oil stocks rose by 5.5-million barrels in the most recent week, the US Energy Information Administration (EIA) said, more than the expected increase of 73,000 barrels.
Petrol product supplied rose in the most recent week to 9.1-million barrels a day, though that figure still shows demand down 6% over the past four weeks compared with the year-ago period.
The premium for front-month WTI futures over barrels loading in six months’ time was pegged at $4.38 a barrel on Thursday, the lowest in four months, indicating easing tightness in prompt supplies.
The resumption of flows on the Russia-to-Europe Druzhba pipeline further calmed market worries over global supplies.
Russian state oil pipeline monopoly Transneft restarted oil flows via the southern leg of the Druzhba oil pipeline. Ukraine had suspended Russian oil pipeline flows to parts of central Europe since early August because Western sanctions prevented it from receiving transit fees from Moscow, Transneft said on Tuesday.
Meanwhile, physical oil prices around the world have begun to sag alongside futures, reflecting easing concerns over Russian-led supply disruptions and heightened worries about a possible global economic slowdown.
Reuters