Oil steady as bullish IEA balances bearish World Bank

Friday, 12 June 2015 00:00 - - {{hitsCtrl.values.hits}}

London (Reuters): Oil prices steadied on Thursday as a bullish report from the International Energy Agency (IEA) agency balanced a gloomy outlook from the World Bank, which cut its global economic growth forecast.

IEA, which coordinates energy policy for industrial nations, raised its projection for global BUP_DFT_DFT-17_02-5 oil demand growth in 2015 by 280,000 barrels per day (bpd) to 1.40 million bpd, bringing demand this year to almost 94 million bpd.

The agency said “unexpectedly strong global oil demand growth” had been supporting oil prices and raised its estimate for world demand for crude from OPEC this year.

But the market response was cautious after a downbeat assessment by the World Bank, which predicted the global economy would expand 2.8% this year, below its 3% outlook in January.

Brent crude oil for July was unchanged at $65.70 a barrel by 0845 GMT. US crude was down 20 cents at $61.23 a barrel.

Traders said Thursday’s reports offered few surprises.

“This is in line with the view that the global economy is improving and by year-end these forecasts are likely to be even stronger as positive price effects from lower oil prices feed into a better economic outlook and higher oil demand,” said Harry Tchilinguirian, head of commodity markets strategy and oil strategy at BNP Paribas.

Brent touched a 2015 high of $67.77 last week after the Organization of the Petroleum Exporting Countries agreed to stick to a policy of unconstrained output for another six months.

Oil prices have drawn support from big falls in US stocks as the US oil market has gradually tightened after many months of heavy oversupply.

The US Energy Information Administration reported that crude oil stocks shrank by 6.8 million barrels last week, the largest drop in almost a year and four times more than forecast by analysts in a Reuters poll.

Prices in North America have been buoyed recently by high gasoline demand for road vehicles as well as low production in Canada as a result of wildfires.