Oil futures settled higher Tuesday, rebounding from a two-month low as a report from the Organization of the Petroleum Exporting Countries revealed forecasts for higher oil demand and lower production next year.
On the New York Mercantile Exchange, August West Texas Intermediate crude CLQ6, -1.65% rose $2.04, or 4.6%, to settle at $46.80 a barrel. That was the highest finish since July 6, according to FactSet. September Brent crude LCOU6, -1.96% gained $2.22, or 4.8%, to $48.47 a barrel on the ICE Futures exchange in London.
OPEC said oil output from its members, based on secondary sources, rose 264,000 barrels to 32.86 million barrels a day in June—above the average 31.9 million barrels-per-day demand for OPEC oil in 2016. But the cartel estimated that demand for OPEC-pumped crude will climb to 33 million barrels a day in 2017.
“This is in line with the Saudi view that the markets will be in balance sometime in the second half of the year. So, you have to call this a bullish report,” said James Williams, energy economist at WTRG Economics.
Non-OPEC oil supplies are also expected to fall by 900,000 barrels a day in 2016 to average 56 million barrels a day, mainly due to lower oil output from Canada in the second quarter due to the wildfire back in May, while non-OPEC oil supply in 2017 is seen down 100,000 barrels a day to 55.9 million barrels a day, the OPEC report said.Read more by clicking right here.
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