NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled higher for the second straight session Thursday. Stronger U.S. demand outlook overshadowed increasing crude supply and a strengthening U.S dollar, while the stock market was mixed.
"The demand situation looks good, and as refineries begin to come back from maintenance we should expect crude demand to increase," said Phil Flynn, an analyst at Price Futures. "Oil was just consolidating the gains from yesterday (Wednesday)."
Early Thursday, the International Energy Agency raised its forecast for world oil consumption in 2018 by 90,000 bpd, underpinned by growth in developed economies. The Paris-based agency also highlighted a strong start to the year for China and India, with the two countries accounting for 50% of the growth in global oil demand in 2017.
Global oil demand is now expected to grow at 1.5 million bpd rate to 99.3 million bpd, said IEA.
The outlook comes on the heels of Energy Information Administration's data Wednesday, which showed U.S. refinery crude oil inputs up last week by 432,000 bpd to 16.367 million bpd. Meanwhile demand for gasoline rose by 366,000 bpd to 9.64 million bpd. In its Oil market Report, IEA projects oil production by countries that aren't part of the Organization of the Petroleum Exporting Countries would climb 1.8 million bpd this year to 59.9 million bpd, led by rising U.S. output, up from an annual growth rate of 760,000 bpd in 2017.
In its weekly report Wednesday, EIA reported domestic crude production rose last week by 12,000 bpd to a fresh record high of 10.381 million bpd in the week-ended March 9, up 1.272 million bpd year-on-year. Domestic output is projected to rise to 10.7 million bpd this year and 11.3 million bpd in 2019.
In addition, IEA was modestly bullish regarding OPEC, saying that the cartel's compliance with its agreement reducing output by 1.2 million bpd from their October 2016 output rate was 147% in February, although that's in part due to the lower production by Venezuela.
At settlement, NYMEX April West Texas Intermediate crude futures gained 23cts to $61.19 bbl while Intercontinental Exchange May Brent crude oil increased 23cts to $65.12 bbl. NYMEX April RBOB futures were near flat at $1.9248 gallon, while April ULSD futures nudged up 0.58cts to $1.8929 gallon.
George Orwel can be reached at email@example.com
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