ECONOMY

Oil price rises past Rs 98 per barrel as IEA sees higher demand this year

Oil prices rose by over 1 per cent on Thursday after the International Energy Agency (IEA) raised its oil demand growth forecast for this year as soaring natural gas prices led some consumers to switch to oil. 

Brent crude futures gained $1.29, or 1.3 per cent, to $98.69 a barrel, while US West Texas Intermediate crude futures rose by $1.45, or 1.6 per cent, to $93.38.  

“Natural gas and electricity prices have soared to new records, incentivising gas-to-oil switching in some countries,” the Paris-based agency said in its monthly oil report, in which it raised its outlook for 2022 demand by 380,000 barrels per day (bpd). 

By contrast, the Organization of the Petroleum Exporting Countries (OPEC) on Thursday cut its 2022 forecast for growth in world oil demand, citing the economic impact of Russia’s invasion of Ukraine, high inflation and efforts to contain the pandemic. 

OPEC expects 2022 oil demand to rise by 3.1 million bpd, down 260,000 bpd from the previous forecast. However, it still sees a higher overall global oil demand figure than the IEA for 2022. 

A rise in US oil inventories last week and the resumption of crude flows on a pipeline supplying central Europe capped further price gains. 

US crude oil stocks rose by 5.5 million barrels in the most recent week, the US Energy Information Administration said, that more than the expected increase of 73,000 barrels. 

Report By