Pump jacks operate at sunset in an oil field in Midland, Texas US August 22, 2018.
AA Business Desk:
Oil prices inched higher on Friday supported by expectations of more OPEC production cuts despite the International Energy Agency (IEA) reporting demand growth at its lowest level since the financial crisis of 2008.
Brent crude futures were at $57.80 a barrel by 0854 GMT, up 42 cents from their previous settlement. West Texas Intermediate (WTI) futures were at $52.80 per barrel, up 26 cents, report Reuters. "Despite a further cut in oil demand growth by the IEA, oil prices are trading marginally higher, as the demand growth cut was already announced previously by the head of the IEA and the agency still expects larger inventory draws for 2H19," UBS analyst Giovanni Staunovo said. The IEA said global oil demand in the first half of 2019 grew at its slowest pace since 2008 hurt by mounting signs of an economic slowdown and a ramping up of the US-China trade war. Oil prices have lost more than 20% from peaks reached in April, putting them in bear territory. Rystad Energy said the oil market was going "from gloomy to gloomier", calling into question the consultancy's own bullish view for the first part of 2020. "Economic recession risk and further escalation of the US-China trade war are key concerns in the near term. How long OPEC+ is willing to continue to manage production adds uncertainty," said Bjørnar Tonhaugen, head of oil market analysis at Rystad Energy. The Organization of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, agreed in July to extend their supply cuts until March 2020 to boost oil prices.
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