U.S. Crude Oil Prices End Higher at $96 a Barrel
U.S. light, sweet crude prices ended marginally higher on Wednesday, supported by worry over global supply disruptions but capped by an unexpected jump in oil inventories in the United States and a cut in estimates for oil demand growth.
Brent crude futures were trading 81 cents higher at $103.77 per barrel, after trading as high as $104.10. The July Brent contract expires on Thursday.
U.S. crude oil futures settled 50 cents higher at $95.88 per barrel.
The International Energy Agency (IEA) said modest economic growth was limiting oil demand worldwide and some developed economies would see absolute declines in oil consumption in 2013.
At the same time, production by the Organization of the Petroleum Exporting Countries (OPEC) was rising, outstripping demand for its oil, with big increases recently in output from Saudi Arabia, Iran and other Middle East Gulf producers.
"The IEA report seems fairly bearish overall," said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt.
"It will do little to end the gloomy picture. OPEC production is rising and running above its target, while demand for its oil is falling... The growth in global oil demand will continue to fall short of the increase in non-OPEC supply."
The IEA report follows similar assessments this week by OPEC and by the U.S. government's Energy Information Administration (EIA). Both cut their global oil demand growth forecasts on Tuesday, while signalling ample supplies in most markets.
Crude oil prices were drawing some strength from continued worries over supply disruptions in Libya and Sudan, among other oil producing nations, traders said.
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Sudan officially informed South Sudan on Tuesday that it would stop allowing its neighbor to export crude through its territory within two months.
Libya's oil output has fallen below 1 million barrels per day due to protests at fields and terminals, its state-owned oil company said.
"Geopolitical turmoil in oil producing countries, including Iraq, Iran, Syria and Libya, may temper downward momentum in the near term," the IEA said in its monthly report.
As well, a tightening in global supply coupled with an increase in refinery runs could support Brent prices.
Summer maintenance work on North Sea oil fields this year will lead to cuts in production substantially higher that the average for the previous six years, the IEA said.
As seasonal refinery maintenance ends, global refinery runs may rise by more than 2 million bpd, the IEA said. While that may cause a glut in refined products as demand China and Europe slow down, "crude supply would struggle to keep up with refining demand until price effects helped rebalance the market."
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Weekly U.S. crude stockpiles rose 2.52 million barrels last week, defying expectations of a 0.7 million barrel draw, data from the EIA showed.
The report followed data released by the American Petroleum Institute on Tuesday that crude oil stocks rose 9 million barrels last week.
The oil market was also keeping its eye on the U.S. stock market and whether central bank stimulus measures would be lifted.
A Bank of Japan decision not to follow up a $1.4-trillion stimulus program announced in April has rekindled fears other central banks, including the U.S. Federal Reserve, could scale back stimulus efforts.