Investing.com – Crude oil prices settled higher on Wednesday after Opec said demand for oil is set to increase in 2018 raising investor expectations that higher demand will rein in excess supplies.
On the New York Mercantile Exchange crude futures for November delivery rose 38 cents to settle at $51.30 a barrel, while on London's Intercontinental Exchange, Brent added 23 cents to trade at $56.84 a barrel.
In its monthly report, the Organization of the Petroleum Exporting Countries (Opec) indicated that market rebalancing will continue amid forecasts that global oil demand will rise by around 30,000 barrels a day for this year and 2018.
The upbeat forecast for oil demand growth, however, was offset by a rise in Opec production by 90,000 barrels a day, fueling concerns that Opec compliance with the deal to curb output is starting to wane.
In May, Opec and non-Opec members agreed to extend production cuts for a period of nine months until March 2018, but stuck to production cuts of 1.8 million bpd agreed in November last year.
Meanwhile in the U.S., the Energy Information Administration raised its crude-oil price forecasts for 2018 despite expectations of an increase in domestic production. For 2018, The EIA forecasts crude prices around $50.57, up 2% from the previous outlook and production to increase 0.8% to 9.92 million barrels a day.
Barclays (LON:BARC) revised upwards its outlook on Brent crude prices for the first quarter of 2018 by $5 to $56 a barrel, noting that the market has shifted from “build mode to draw mode”.
The duo of reports comes ahead of the EIA’s weekly update on inventories expected to show crude oil stockpiles fell for the third-straight week.