IEA Report Weighs On Crude Oil Prices

This morning crude oil continues to ease dipping 23 cents to trade at $92.28. Crude oil retraced back from the high of $93.40 and in the process settled lower yesterday at $92.51. A rise in US oil inventories and bearish forecast from the IEA weighed on the sentiment. The EIA reported that crude stocks rose 2.62mn barrels compared with the expectations for a rise of 2.3mn barrels. Meanwhile, International Energy Agency has cut estimates for global oil demand. Crude oil prices closed slightly lower, as better than-expected US retail sales lifted the dollar to a 7-month high, putting an end to a climb in dollar-denominated assets. The dollar climbed to a 7-month high against a basket of currencies and a 3-month peak against the euro on Wednesday, as robust US retail sales data bolstered prospects for the world’s largest economy. The dollar index rose to 82.882, after a high of 83.055 — its highest level since early August and compared with 82.585 on late Tuesday.

The International Energy Agency most recent report just released continued to inch lower on its forecasts for global oil demand while increasing its expectations of supply growth for this year. 
Since January, the Paris-based energy watchdog has cut 200,000 barrels a day from its forecast for oil demand in 2013 and added 200,000 barrels a day to its expectations of supply growth from countries outside the Organization of Petroleum Exporting Countries, or OPEC. 

“The subdued growth rate of oil demand now looks increasingly entrenched in the face of high oil prices and weak economic growth,” the IEA said.  In its closely watched monthly report on the oil market, the Paris-based agency, which represents the interests of major energy-consuming rich countries, estimated oil demand will grow by just 820,000 barrels a day this year to 90.6 million barrels a day, while supply from non-OPEC countries will increase by 1.1 million barrels a day to 54.5 million barrels a day. 
A shale oil boom in the U.S. has contributed to a steep increase in non-OPEC supply and the IEA also said there are prospects that some 200,000 barrels a day of oil could return to the market by the end of the year if South Sudan resumes exports. 

Natural gas futures rose more than 1% to a fresh 3-month high on NYMEX, as weather forecasts suggested heating demand will remain strong through the last weeks of winter.  U.S. natural gas futures ended higher cold weather expected to return to consuming regions of the nation late this week and next. Natural gas inventories are expected to decline by 135-140bn cubic feet, actual data will be released by EIA later in the day. Natural gas is trading at 3.68 this morning almost flat to yesterday’s close.