Oil prices edged higher as buyers digested contrasting figures from the Organisation of the Petroleum Exporting Countries (OPEC), the US, and the International Energy Agency (IEA).
OPEC said it expected a small deficit in the oil market next year, suggesting the market is tighter than previously thought. However, despite lower than expected US production growth, there has been a recent rise in US crude oil stockpiles, and the influential IEA said that the oil market could remain oversupplied.
Brent Futures rose 24 cents, or 0.4 per cent to $63.96 a barrel after falling one per cent on news of the U.S. stocks build-up.. West Texas Intermediate crude was down 10 cents, or 0.2 per cent, at $58.85 a barrel, following a 0.8 per cent drop the previous session.
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Despite US production growth slowing down, US crude and global oil inventories could rise sharply. The US figures showed that the country had, gained more than 800,000 barrels, whilst inventories of petroleum products also increased with gasoline stocks increasing by more than 5 million barrels and distillates gaining a bit over 4 million barrels.
“Despite the additional curbs ... and a reduction in our forecast of 2020 non-OPEC supply growth to 2.1 million barrels per day (bpd), global oil inventories could build by 700,000 bpd in Q1 2020,” the International Energy Agency (IEA) said in its monthly report.
OPEC agreed last week to rein in output by an extra 500,000 bpd in the first quarter of 2020 in order to balance the market and buoy prices. The IEA said only 530,000 bpd of crude would be withdrawn from the market compared to November production.
The IEA revised down its forecast for supply growth by non-OPEC countries in 2020 by 200,000 bpd.
Meanwhile, Goldman Sachs forecasts gold to rise to $1,600 an once, an 8.5 per cent gain from current levels.
The metal has been strong over the past 12 months, rising nearly 14 per cent amid lower interest rates and a moderating US dollar.