By Peter Nurse
Investing.com -- Oil prices rose Thursday, boosted by the International Energy Agency lifting its forecast for crude demand growth, adding to the week’s gains on the back of weaker-than-expected U.S. inflation data.
By 09:05 ET (13:05 GMT), U.S. crude futures traded 1.8% higher at $93.55 a barrel, while the Brent contract rose 1.6% to $98.94.
U.S. Gasoline RBOB Futures were up 0.9% at $3.0969 a gallon.
The Paris-based intergovernmental organization raised its outlook for 2022 demand by 380,000 barrels per day, citing steep price rises in competing energy sources.
"Natural gas and electricity prices have soared to new records, incentivising gas-to-oil switching in some countries," the agency said in its monthly oil report.
This news has been received positively even though OPEC took a contrary view, cutting its forecast for growth in world oil demand in 2022 for a third time since April.
The Organization of the Petroleum Exporting Countries said, in its monthly report Thursday, it expects oil demand to rise by 3.1 million barrels per day in 2022, down 260,000 barrels per day from the previous forecast.
"Global oil market fundamentals continued their strong recovery to pre-COVID-19 levels for most of the first half of 2022, albeit signs of slowing growth in the world economy and oil demand have emerged," OPEC said in the report.
On the supply side, the IEA said Russia’s oil output is set to fall roughly 20% by the start of next year as a European Union import ban comes into force, with close to two million barrels a day shut in by the start of 2023.
Oil prices are up around 5% this week, rebounding from the largest weekly drop since April 2020 last week, helped by a reassessment of the Federal Reserve’s likely monetary tightening path in the wake of the softer-than-expected U.S. CPI release.
Still, the rise in U.S. oil inventories last week and the resumption of crude flows on a pipeline supplying central Europe capped further price gains.
U.S. crude oil stocks rose by 5.5 million barrels in the most recent week, the U.S. Energy Information Administration said Wednesday, more than the expected increase of 73,000 barrels.
“Lower crude oil exports helped with the inventory build,” said analysts at ING, in a note. “U.S. crude oil exports fell by 1.4MMbbls/d to 2.11MMbbls/d over the week- the lowest weekly export number since January.”