Crude oil futures moved higher Thursday, finding support after the International Energy Agency raised its forecast for global oil-demand growth as summer heatwaves in Europe and tight natural-gas supplies prompt more oil use for power generation.
Oil remained higher after the Organization of the Petroleum Exporting Countries cut its forecast for demand growth in 2022, citing worries over COVID restrictions and geopolitical tensions.
West Texas Intermediate crude for September delivery
rose $2.41, or 2.6%, to finish at $94.34 a barrel on the New York Mercantile Exchange.
October Brent crude
the global benchmark, gained $2.20, or 2.3%, to settle at $99.60 a barrel on ICE Futures Europe.
Back on Nymex, September gasoline
rose less than 0.1% to $3.0715 a gallon, while September heating oil
gained 2.2% to $3.484 a gallon.
September natural gas
jumped 8.2% to $8.874 per million British thermal units.
The IEA said high prices and limited supplies of natural gas in Europe, after Russia cut energy exports to the region, have pushed power plants and heavy industries to look to oil as an alternative fuel source. The Paris-based IEA said the trend would result in additional oil-demand growth of 380,000 barrels a day in 2022, with the agency lifting its oil-demand growth forecast by that amount to 2.1 million barrels a day.
OPEC, meanwhile, cut its estimate of 2022 demand growth to 3.1 million barrels a day from a previous forecast of 3.4 million barrels a day, or mb/d. OPEC described the outlook as still healthy, with total oil demand expected to average around 100 mb/d in 2022.
“Incredibly, the IEA posted a rather rosy demand scenario, while the OPEC Monthly Report was relative gloom and doom…the producer group shooting themselves in the foot a bit, with the IEA saving the day,” said Robert Yawger, executive director for oil futures at Mizuho Securities, in a note.
Oil ended a choppy session with gains Wednesday, after the Energy Information Administration said U.S. crude inventories jumped 5 million barrels in the week ended Aug. 5, while gasoline supplies fell 5 million barrels and distillate supplies rose 2.2 million barrels. Analysts surveyed by S&P Global Commodity Insights had forecast, on average, a 600,000 barrel rise in crude inventories, a 1.2 million barrel drop for gasoline and a 900,000 barrel fall for distillates.
Rising gasoline inventories in recent weeks have contributed to a sharp retreat from all-time highs for gasoline futures and pump prices, with tracking services showing the average U.S. gasoline price falling below $4 a gallon this week.
Read: Why are gas prices falling? GasBuddy reports national average falls below $4
“WTI is back above $90 but that could change if we see progress on the Iran nuclear deal. It’s seen plenty of support around $87-88 over the last month though as the tight market continues to keep the price very elevated,” said Craig Erlam, senior market analyst at Oanda, in a note.
The European Union on Monday presented what it described as its final text for restoring the 2015 nuclear accord with Iran, signaling it was up to Tehran to take or leave it. Iranian officials have said they delivered an initial response to the draft and would make further points at a later date, news reports said.
A criminal complaint unsealed Wednesday said an Iranian national plotted to assassinate former National Security Adviser John Bolton and another official in retaliation for a U.S. strike that killed Iran’s most powerful general.
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