The price of crude oil rose more than $2 a barrel after the International Energy Agency raised its forecast for oil demand growth this year as rising natural gas prices push some consumers to switch to oil.
Brent crude rose $2.39, or 2.5%, to $99.79 a barrel.
“Natural gas and electricity prices soared to new records, spurring a shift from gas to oil in some countries,” the Paris-based monthly oil report said. It raised its 2022 forecast by 380,000 bpd.
In contrast, the Organization of the Petroleum Exporting Countries (OPEC) lowered its forecast for global oil demand growth for 2022, citing the economic fallout from Russia’s invasion of Ukraine, high inflation and efforts to contain the pandemic. OPEC expects oil demand to grow by 3.1 million barrels per day in 2022, down 260,000 barrels from its previous forecast.
However, total global oil demand in 2022 is still higher than the IEA.
Prices also rose on a weaker dollar, which extended losses against other major currencies after a report showed U.S. inflation was not as high as expected in July, prompting traders to abandon expectations of future Federal Reserve rate hikes. the US system.
A rise in U.S. crude inventories last week and the resumption of crude oil flows through a pipeline that supplies Central Europe stopped further price gains.
U.S. crude oil inventories rose by 5.5 million barrels in the past week, the U.S. Energy Information Administration said, more than expected.
Crude supplies rose last week to 9.1 million barrels per day, although the figure indicated a 6% decline in demand over the past four weeks compared to the same period last year.
The restoration of flows on the southern section of the Druzhba oil pipeline from Russia to Europe further calmed market concerns about global supplies.
The Russian state oil pipeline company Transneft has resumed the flow of oil through the southern section of the Druzhba pipeline.
Transnefta said this week that Ukraine had suspended Russian oil pipeline flows to parts of Central Europe since the beginning of this month because Western sanctions prevented it from receiving transit fees from Moscow.
Meanwhile, German energy giant RWE is in talks with more liquefied natural gas (LNG) suppliers than just Qatar and North America, CEO Markus Krebber said, as Germany’s biggest power producer continues efforts to replace volumes of Russian gas. .
Earlier this year, RWE said it was in discussions with potential LNG suppliers in the US and Qatar as Germany tries to diversify away from Russia, its biggest natural gas supplier. Sources told Reuters in May that negotiations with Qatar had proved difficult due to disagreements over key points in the contract, particularly disagreements over how long the supply agreements would last.
German Economy Minister Robert Habeck said last month that Qatar had decided not to make a good offer and that potential importers were sourcing gas elsewhere for now. reported.
