Oil breaches US$50 as worldwide energy demand outlook brightens

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Today is the fourth consecutive day of gains for oil prices that have been enjoying a good week, in which OPEC reported lower production for August, followed by the International Energy Agency's (IEA) assessment for strong demand growth.

As the deal aims to check the oil supply glut that has weighed on crude prices for more than three years, OPEC sees signs of a tighter global market and thus raised its global demand outlook for next year.

However, U.S. data showed a big increase in crude inventories due to the ongoing effects of hurricane.

USA gasoline stocks slumped 8.4 million barrels, the largest weekly decline since the data began in 1990. Growth is forecast to average 700,000 b/d in 2017 and almost 1.5 mb/d in 2018 as higher production from Canada and the North Sea offsets weaker United States and Brazilian estimates.

In a monthly report, the Organization of the Petroleum Exporting Countries said the world would need 32.83 million barrels per day (bpd) of OPEC crude next year, up 410,000 bpd from its previous forecast.

Rising demand pushed USA crude above $50 a barrel on Thursday, while sterling jumped after the Bank of England said it was likely to raise interest rates for the first time in a decade in coming months.

West Texas Intermediate for October delivery climbed 59 cents to settle at US$49.89 a barrel on the New York Mercantile Exchange after earlier reaching US$50.50 during the session.

"Consequently, our estimated demand growth for 2017 has been increased to 1.6 mb/d. Undoubtedly this boost in demand will contribute to further reductions in commercial oil inventories", he said.

The IEA the impact of Hurricane Harvey, which struck the US Gulf Coast at the end of August where significant US refinery and export operations are concentrated, on oil markets should be brief.

Futures jumped 1.2 per cent in NY, and closed just 11 cents shy of the US$50 mark.

David Madden, a market analyst at CMC Markets UK, said: In London, miners like Rio Tinto, BHP Billiton, Anglo American, and Glencore are offside due to the large drop in the price of copper.

Global oil commercial stocks remained unchanged in July 2017 at 3.016 billion barrels versus June.

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