Oil advanced in New York, paring an eighth weekly decline, as the International Energy Agency (IEA) lowered forecasts for supplies from outside OPEC and said prices could recover, Bloomberg reported.
West Texas Intermediate futures climbed as much as 3.6 percent. The grade is heading for a loss of 1.8 percent this week, capping the longest run of weekly declines since March 1986. Non-OPEC oil producers will increase output this year at a slower rate than previously forecast, aiding a recovery in crude prices, the IEA said in its monthly market report.
West Texas Intermediate for February delivery climbed as much as $1.67 to $47.92 a barrel in electronic trading on the New York Mercantile Exchange, trading for $47.50 on Friday.
Brent for March settlement was $1.45, or 3 percent higher, at $49.72 a barrel on the London-based ICE Futures Europe exchange. The February contract expired on Thursday after decreasing $1.02 to $47.67. The European benchmark crude traded at a premium of $1.82 to WTI for the same month.
Oil fell almost 50 percent last year, the most since the 2008 financial crisis, as supplies swelled amid the fastest pace of US production in more than three decades and the Organization of Petroleum Exporting Countries (OPEC) resisted calls to cut output. Goldman Sachs Group Inc. and Societe Generale SA were among banks to reduce their price forecasts this week.
The IEA, a Paris-based adviser to consuming nations, lowered its non-OPEC supply growth estimate by 350,000 barrels a day, the first cut since the 2015 forecast was introduced in July. Half the reduction is from Colombian output while effects on US production are so far “marginal,” it said.
The slow-down in output growth will lead to a “rebalancing” of currently over-supplied global markets in the second half, reviving prices, the agency said.
