OIL STEADY AS IEA FORECAST AND CHINA DATA PROVIDE SUPPORT
Oil prices rose slightly, supported by data showing China, the world's second largest oil consumer after the U.S., are growing faster than expected. This offset worries prompted by lingering concerns about the spreading European debt problems.
The IEA, the West's energy watchdog, predicted global oil demand would rise next year to a hefty 91 million barrels per day (bpd), out pacing a more conservative prediction by OPEC.
Brent for August rose a cent to 117.76 dollars a barrel after falling as much as 86 cents to 116.89 dollars. This was under pressure from an industry report showing a surprise gain in U.S. crude inventories and the downgrade of Ireland's credit rating. U.S. crude added 32 cents to 97.75 dollars, after touching a low of 96.53 dollars earlier in the day.
China's second-quarter gross domestic product rose 9.5 per cent from a year earlier, exceeding economists' forecasts for 9.4 per cent growth.
The country's implied oil demand in June rose 1.1 per cent from a year earlier, the slowest growth rate since April 2009. In its first 2012 forecast in a monthly report, the IEA said demand would grow by 1.47 million bpd, slightly lower than a forecast from the U.S. Energy Information Administration, but more than expected by OPEC.
This had a muted impact on prices as analysts were not surprised by the figures.
'It's in line with what other analysts have, the reason for the rise in 2012 is because of weakness in 2011 because of soft demand due to high prices,' said Christophe Barret, oil analyst at Credit Agricole Corporate and Investment Bank.
'There's an increase of nearly one million barrels per day from non OPEC producers, so that makes room for OPEC not to have the need to make big increases.'
Data early in the week was marginally bearish for oil prices. U.S. stockpiles of distillates including heating oil and diesel posted a larger-than-expected increase last week, the American Petroleum Institute (API) said.