Investing.com – Crude oil fell in Asia on Friday after tested an intermediate range ballistic missile over the Japanese island of Hokkaido and into the Pacific Ocean in the latest tit-for-tat with the U.S. and its allies for pushing UN economic sanctions, with investors looking ahead to the latest weekly U.S. data.
On the New York Mercantile Exchange crude futures for October delivery dropped 0.52% to $46.93 a barrel, while on London’s Intercontinental Exchange, fell 0.29% to $55.10 a barrel.
Overnight, crude oil prices settled at seven-week highs on Thursday buoyed by a pair of reports earlier in the week suggesting that rising global oil demand could stem the glut in crude supplies.
started the session on the front foot surging above $50 a barrel for the first time in five weeks, as investors continue to cheer an International Energy Agency (IEA) report released Wednesday estimating global oil demand this year will climb by the most since 2015.
The IEA revised upwards its estimate for demand growth in 2017 by 100,000 barrels a day (bpd) to 1.6m bpd, or 1.7%. The bullish outlook for oil demand, lifted expectations that the demand and the supply imbalance in oil markets would continue to narrow in the coming months.
The IEA’s report came a day after Opec said production in August fell by 79,000 barrels a day (bpd) to 32.76 million as falling production from Venezuela, Iraq, the UAE and Saudi Arabia offset rising output from Nigeria.
The fall in Opec output came as a relief to investors, many of whom had questioned the oil-cartel’s commitment to tackle excess supplies following a drop in the group’s the rate of compliance with the global accord to curb production.
“Stronger demand and supply restrictions from OPEC and Russia are the main reasons for the oil price upsurge,” said Forex.com analyst Fawad Razaqzada.
In May, Opec and non-Opec members agreed to extend production cuts of 1.8m barrels per day for a period of nine months until March 2018.
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