NEW YORK, Aug. 12 (UPI) — Expectations of future growth in energy demand and the potential for a slowdown in U.S. crude oil production gave a modest lift to crude oil prices Wednesday.
Brent crude oil prices saw only small gains in early trading Wednesday, up a small fraction of a percent to $49.24 per barrel. West Texas Intermediate, the U.S. benchmark for oil prices, was up six tenths of a percent from the previous session’s close to trade at $43.48 per barrel.
Both indices remain near the lowest price point for 2015 amid signs global supplies of crude oil are far in excess of demand. Two recent reports, however, suggest the momentum may be reversing.
The International Energy Agency said in its latest market report demand for oil, encouraged in part by low prices, is increasing at its fastest rate since 2010. In the United States, where recent figures indicate a healthy labor market, IEA said it saw the sixth consecutive month of demand growth for gasoline and other products.
IEA’s assessment followed the release of the July market report from the Organization of Petroleum Exporting Countries, which said it expected global oil demand would grow by nearly 1.4 million barrels per day, about 7 percent above its previous forecast.
OPEC’s data show production from the 12-member group increased by a net 100,700 barrels to 31.5 million last month. OPEC in the past has said it needs to keep up with production to ensure its market position in an era when U.S. oil production continues to make strong gains.
The U.S. Energy Information Administration said in its short-term energy outlook, however, that U.S. crude oil production for the year is expected to grow by 650,000 bpd, down from the 750,000 bpd in previous forecasts.
Wednesday’s recovery may be short-lived amid lingering concerns about the health of the Chinese economy. Beijing this week devalued its currency in an effort to prop up its economy, sending global stocks values plummeting.