OPEC sees higher 2018 oil demand, trims output

Oil prices rise for 3rd straight session as IEA reports drop in global supply

The EIA report dovetails with a report from the Paris-based International Energy Agency, issued Wednesday, that raised its estimate of 2017 world oil demand growth to 1.6 million barrels per day from 1.5 million bpd. Oil topped US$50 (RM209) a barrel for the first time and closed at a six-week high amid heightened optimism that a demand resurgence is in the offing.

There are signs the global oil market is returning to balance and stocks of oil products in industrialised nations could soon fall below their five-year average, the IEA said Wednesday.

Data from the Energy Information Administration showed a build in US crude inventories last week of 5.9 million barrels, exceeding expectations.

"Demand growth is strengthening: robust demand in OECD (the Organisation for Economic Co-operation and Development) countries was a key factor in 2Q17's global growth of 2.3 mb/d, the highest quarterly year-on-year increase since mid-2015".

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"Though hard to predict, if stockpiles continue to deplete and demand remains fairly steady in OECD economies, whilst emerging Asia (including China) increases energy consumption, crude prices could trade around the US$54-57/barrel range in Q4 2017, rising to US$60 in Q1 2018", commented Moin Siddiqi, economist.

"The news was taken as confirmation of the prevalent supply tightening narrative, i.e. that the oil surplus is slowly disappearing", said Norbert Rucker, head of macro and commodity research at Julius Baer.

And data indicating higher demand and falling output from major oil exporters have bolstered prices all week.

Futures jumped 1.2 per cent in NY, and closed just 11 cents shy of the US$50 mark.

Oil nears $49 as brighter demand outlook sparks optimism
Meanwhile, the Energy Information Administration will report weekly US crude stockpile and production data at 10:30 a.m. "Irma will have a negative impact on oil demand but not on oil production or processing".

Oil is higher for the fourth day in a row as the United States refinery industry restarts after Harvey.

In London November Brent rose 89 cents, or 1.6%, to end at $US55.16 a barrel, which was the highest finish since mid-April.

The report said its collective production was 32.76 million barrels a day last month, more than 79,000 barrels less than July.

Referencing to the oil production cut agreed by OPEC members, he said all nations need to work together to avoid a supply crunch adding that energy and environmental issues "are of common concern and, as such, can not be pursued in isolation".

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OPEC members have publicly mulled over extending production cuts implemented earlier this year, which would further restrict the supply of oil.

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