- Oil prices on both sides of the Atlantic are down at least 1 percent.
- The International Energy Agency (IEA) sees supply outstripping demand in 2018.
- The IEA report counters the bullish OPEC report.
Oil is leading the risk-off action; currently down 1 percent on fears that rising US output and weak demand growth would keep the market oversupplied in 2018.
As of writing, Brent oil is trading at $61.47; down 74 cents or 1.2 percent. Meanwhile, WTI oil is down 58 cents or 1.04 percent at $55.12.
WTI oil hit a low of $54.82 on Tuesday before regaining some poise. However, it still trades below the ascending trendline (drawn from the Oct. 20 low and Oct. 26 low).
Prices took a hit yesterday after the IEA cut its oil demand growth forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018. “The oil market faces a difficult challenge in 1Q18 with supply expected to exceed demand by 600,000 bpd followed by another, smaller, a surplus of 200,000 bpd in 2Q18,” the IEA said.
The focus today is on the US inventory data. A big drawdown in inventories could see oil recover losses. Note that US output has already increased by 14 percent this year.
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