IEA says oil demand subdued on economic uncertainty

Chart showing Persian Gulf

The report suggests there will be a 2020 supply surplus of 340,000 bpd if OPEC keeps pumping at August's rate and other things remain equal, more than the surplus forecast in last month's report.

"The installation of the necessary pipelines and terminals is continuing apace, which will ensure that the trend continues".

Oil prices traded higher on Wednesday after an industry report said USA crude stockpiles fell last week by more than twice the amount that analysts in a Reuters poll had forecast.

USA crude stocks have fallen almost 22 million barrels in a span of just three weeks, with the draws coming unusually at the tail end of summer, when driving activity in the typically on the decline.

At the same time, Saudi Arabia cut back on both crude and refined product exports.

Oil prices are down about 15% from its peak in April as markets have been under pressure on fears that the Sino-U.S. trade war would drag on. Estimates are based on preliminary data from direct communication for non-OPEC supply, OPEC NGLs and non-conventional oil, while estimates for OPEC crude production are based on secondary sources.

Bolton's departure from the White House could be seen as improving the odds of such a meeting taking place which traders have evidently viewed as a potential tailwind for crude oil supply - thus dinging the commodity's price.

Overnight, U.S. President Donald Trump said in a tweet that he will be postponing the imposition of 5% extra tariffs on Chinese goods by two weeks "as a gesture of good will".

"The world often asks: what does that mean?"

The concessions also preceded a planned meeting in coming days aimed at defusing the long-running trade row between the world's two largest economies.

To compound the cartel's troubles, OPEC now expects demand for crude to drop from prior year-over-year growth of 1.10 million barrels a day to 1.02 million barrels.

A further drag on crude prices is rising supply.

Benchmark Brent crude declined 0.9 percent to $60.27 a barrel, while West Texas Intermediate Crude oil futures were down 0.7 percent at $55.36 a barrel.

"With production expanding strongly, the question is can sellers of US crude price exports attractively enough to capture global markets?" the energy agency added.

OPEC, in its monthly report on Wednesday, forecast that demand for its own crude will average 29.4 million barrels per day in 2020, down 1.2 million bpd from this year.



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