Slightly weaker oil holds on to some recent gains
Tokyo — Oil prices eased on Thursday, but held on to most of their gains in the previous session when the market was buoyed by a forecast for firmer global oil demand by the International Energy Agency (IEA).
London Brent crude for November delivery was down 13c, or 0.2%, at $55.03 a barrel by 2.47am GMT, after rising 1.6% on Wednesday.
Nymex crude for October delivery was down 9c, or 0.2%, at $49.21, after a 2.2% gain in the previous session.
Wednesday’s gains came despite US government data showing another big build in US crude inventories due to Hurricane Harvey.
The International Energy Agency raised its 2017 global oil demand growth estimate to 1.6-million barrels a day from 1.5-million barrels a day.
The energy agency said the global oil surplus was beginning to shrink due to stronger than expected European and US demand growth, as well as production declines in Opec and non-Opec countries.
The supply side of the equation was also looking promising, Barclays Research said in a note.
"Unrest in Iraq and Venezuela should keep output there in check, regional crude oil contangos have dissipated, and stocks are gradually declining," it said.
Contango is when the future spot price is below the current price, so people will pay more for a commodity at some point in the future than the actual expected price of the commodity.
That said, "a softer market balance is in store for next year, which should ensure an Opec/non-Opec deal remains in place beyond March 2018", Barclays said.
Oil cartel Opec and other producers, including Russia, are reducing crude output by about 1.8-million barrels a day until next March in an attempt to support prices.
US Energy Information Administration (EIA) data showed a build in US crude inventories last week of 5.9-million barrels, exceeding expectations.
US petrol stocks slumped by 8.4-million barrels, the largest weekly decline since data began in 1990. US petrol futures extended declines on Thursday as demand is expected to slip due to the effects of Hurricane Irma on the high-consuming states of Florida and Georgia.
Distillate stocks fell by 3.2-million barrels, the data showed.
ExxonMobil Corp said on Wednesday it was restarting its 362,300 barrels a day refinery in Beaumont, Texas, for the first time since it was shut by Harvey.