Oil prices bounce back after dip
LONDON, March 15, 2018 – Crude oil prices bounced higher on Thursday, erasing earlier losses, after the International Energy Agency forecast an increase in global oil demand for the next year, although it also warned about the consequences of protectionist U.S. policies.
The U.S. West Texas Intermediate crude April contract was up 49 cents or about 0.80% at $61.45 a barrel by 10:00 a.m. ET (14:00 GMT), off session lows of $60.83.
Elsewhere, Brent oil for May delivery on the ICE Futures Exchange in London gained 42 cents or about 0.65% to $65.31 a barrel.
In its monthly report released on Thursday, the IEA increased its global demand growth outlook for 2018 by 100,000 barrels per day (bpd) to 1.5 million bpd.
The Agency also noted that changes in trade policy could have a negative impact on oil production, with a slowdown most likely hitting maritime and trucking fuels.
Fears of a potential global trade war were reignited after Trump announced plans to impose tariffs on up to $60 billion of Chinese imports, specifically targeting the technology and telecommunications sectors.
The report came a day after the Organization of the Petroleum Exporting Countries and Russia forecast non-OPEC supply of around 1.60 million bpd for 2018, compared to 1.40 million bpd prior.
However, OPEC added that its efforts to cut supply continued to contribute to rebalancing the market.
OPEC agreed in December to cut oil output by 1.8 million bpd until the end of 2018. The agreement was due to end in March 2018, having already been extended once.
Oil prices had come under pressure after the U.S. Energy Information Administration (EIA) said on Wednesday that crude oil inventories rose by 5.022 million barrels in the week ended February 10, compared to expectations for a crude-stock build of 2.023 million barrels.
However, the report also showed that gasoline inventories decreased by 6.271 million barrels, compared to expectations for a draw of 1.176 million barrels, while distillate stockpiles fell by 4.360 million barrels, compared to forecasts for a decline of 1.519 million.
Elsewhere, gasoline futures climbed 0.50% to $1.931 a gallon, while natural gas futures were down 0.26% at $2.732 per million British thermal units.