Oil prices hold ground, but set for 4 pct weekly fall

This Day In Market History OPEC Cutbacks Send Oil Prices Skyrocketing

This Day In Market History OPEC Cutbacks Send Oil Prices Skyrocketing

Commenting on the report, "The weaker outlook has gotten a raised profile in the market, but there's potential for a real supply crunch toward the end of this year".

Both global oil demand and supply are now close to new, historically significant peaks at 100 million barrels per day (MMbpd) "and neither show signs of ceasing to grow any time soon", according to the International Energy Agency (IEA).

Oil edged further above $80 a barrel on Friday as a rally in equities lent support, though prices pared most of their gain after a closely watched forecaster deemed supply adequate and the outlook for demand weakening.

"This is due to a weaker economic outlook, trade concerns, higher oil prices and a revision to Chinese data", the IEA said in a statement in its monthly oil report.

The Organization of the Petroleum Exporting Countries (OPEC) cut its forecast of global demand growth for oil next year for a third straight month, citing headwinds facing the broader economy from trade disputes and volatile emerging markets.

A drop in United States oil production also lent prices some support.

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Members of the Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing allies such as Russian Federation agreed in June to raise oil output. At 410.0 million barrels, the figure is at the five year average for this time of year. Producers in the so-called OPEC+ coalition, which also includes Russian Federation, have added 1.6 million barrels a day since May, the report showed.

"The weaker outlook has gotten a raised profile in the market, but there's potential for a real supply crunch toward the end of this year", said John Kilduff, a partner at Again Capital Management in NY.

Yet the IEA also recognized that the efforts by producers have sharply depleted the amount of spare supply kept aside for disruptions and emergencies, most of which is held by Saudi Arabia.

The amount available will nearly certainly be tested in the coming months as USA sanctions take effect on Iran, which has already seen supplies fall to the lowest in more than two years, according to the report.

November natural gas NGX18, -2.36% declined by 1.9% to $3.161 per million British thermal units on Friday, but saw a weekly rise of about 0.6%.

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