Oil continue to rise towards $83 a barrel by mid

Oil continue to rise towards $83 a barrel by mid

Oil continue to rise towards $83 a barrel by mid

Brent crude oil prices dipped below $63 a barrel today as the International Energy Agency (IEA) revised its oil demand forecast down due to mild early winter temperatures and rising production from some countries.

"Oil is already facing stiff competition from ever-cheaper and more environmentally friendly energy sources as traditional fossil fuel users switch to cleaner, low-carbon alternatives", IEA said in its World Energy Outlook 2018.

With big gains forecast in its output of shale oil, the United States is expected to become a net oil exporter by the mid-2020s, the IEA said, adding that the US will account for 80 per cent of the increase in the global oil supply to 2025, which will maintain near-term downward pressure on prices.

A cooling Chinese economy also stoked some concerns about demand, although so far the country's refiners are processing crude oil near record levels of 11.89 million bpd. "This is a continuation of the strong demand growth we are seeing in our short term oil market analysis", the report said.

"The recent price support, namely the tension in the Middle East, has been swept aside as rising rig counts and USA shale output (are) in the focus of traders", PVM Oil Associates analyst Tamas Varga said.

USA oil prices have risen above $55 a barrel recently amid geopolitical tensions overseas, supply disruptions and an anticipated extension of OPEC's production cuts next year.

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Worldwide, oil consumption is seen reaching 97.7 million bpd in 2017, up 1.5 million bpd from 2016. This latest move comes as investors expect figures to show USA oil production has risen.

After hitting a 10-year low of less than $30 in January, down from a peak of more than $100 in mid-2014, oil prices have recently been hovering around the $55 mark. The IEA estimates that there will be 50 million electric vehicles on the road by 2025 and 300 million by 2040, from closer to 2 million now. The figure was even lower based on secondary sources rather than what the government reports, at 1.863 million bpd in October, according to Opec.

The International Energy Agency on Tuesday delivered a more cautious outlook for oil demand.

"Next year's demand growth will struggle to match this", the IEA said.

Between 2017 and 2040 the IEA estimates that more solar power capacity will be added globally each year than any other source of energy, with an annual average increase of almost 70 gigawatts.

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