LONDON, Sept 14 – Oil prices stabilized on Wednesday, after falling more than a dollar earlier in the session, following signs of bullish demand in a report from the International Energy Agency (IEA).
* By 0933 GMT, Brent crude futures were up 8 cents, or 0.09%, at $93.25 a barrel. US West Texas Intermediate crude was up 4 cents, or 0.05%, at $87.35 a barrel.
* Prices stabilized after some “positive elements” in an IEA report released on Wednesday, UBS analyst Giovanni Staunovo said.
* The IEA forecasts a large-scale switch from gas to oil, estimated at an average of 700,000 barrels per day (bpd) between October 2022 and March 2023, twice as many as a year ago. The IEA said observed global inventories fell by 25.6 million barrels in July.
* This follows Tuesday’s Organization of the Petroleum Exporting Countries forecasts for global oil demand growth in 2022 and 2023, citing signs that major economies were doing better than expected despite challenges such as rising inflation.
* However, analysts suggest OPEC’s bullish view may be wishful thinking.
* “OPEC continues to view the global economy through rose-colored glasses despite the threat of recession in several key economies,” said Stephen Brennock of oil broker PVM.
* And the IEA expects global oil demand growth to stall in the fourth quarter of this year, as the economic slowdown deepens.
* On Tuesday, a higher-than-expected U.S. inflation report dashed hopes that the Federal Reserve might ease its rate policy tightening in coming months. Fed officials are due to meet on Tuesday and Wednesday, and inflation remains well above the US central bank’s 2% target.
* Price pressure continued in the wake of tough COVID-19 restrictions in China, which are reducing fuel demand in the world’s largest oil importer.
* On the supply side, US crude stocks rose by about 6 million barrels in the week ending September 9, according to market sources citing figures from the American Petroleum Institute on Wednesday.
* The US government is to release inventory data at 1430 GMT on Wednesday.
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