OPEC cuts 2020 oil demand forecast, urges effort to avert new glut

Oil prices gain after bigger-than-expected fall in US stockpiles

Oil prices gain after bigger-than-expected fall in US stockpiles

He recalled that last November OPEC and other producers, headed by Russian Federation, agreed to cut production by 1.2 million bpd.

That, and another drop of 180,000 bpd in crude imports last week, ostensibly from OPEC sources, were among the key drivers for the near 6.9-million-barrel drop in US crude stockpiles for the week, the EIA's weekly data showed. Meanwhile, on the supply side, Saudi Arabia and other members of the Organization of Petroleum Exporting Countries have been cutting output.

Global oil demand is weathering economic headwinds, the International Energy Agency (IEA) said Thursday, buoyed by lower prices brought on by abundant supply as the United States briefly dethroned Saudi Arabia as the world's top exporter.

"We've been talking and talking about OPEC losing market share from their production cuts and now we're finally seeing evidence of it from the burgeoning weekly export numbers of USA crude", said John Kilduff, founding partner at NY energy hedge fund Again Capital.

Oil prices LCOc1 pared an earlier gain after the report was released to sit just below $63 a barrel.

U.S. President Donald Trump has repeatedly needled OPEC over the price of oil, urging its member countries to increase their production. The ongoing trade dispute also made it hard for USA shale shipments to find markets in recent months, the IEA said.

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Even so, stocks in July exceeded the five-year average - a yardstick OPEC watches closely - by 36 million barrels.

A further drag on crude prices is rising supply.

The policy has given a sustained boost to USA shale and other rival supply, and the report suggests the world will need less OPEC crude next year.

OPEC, in its monthly report on Wednesday, forecast that demand for its own crude will average 29.4 million barrels per day in 2020, down 1.2 million bpd from this year.

Iraq, OPEC's second-largest oil producer, pledged on Thursday to reduce output by 175,000 bpd by October, while Nigeria is to reduce supply by 57,000 bpd. It was the first increase this year. Nigeria, Iraq and Russian Federation have, at times, produced above their quota.

He said the meeting on Thursday also discussed rising US shale output and exports, a global economic slowdown and a possible softening of USA sanctions on OPEC member Iran.

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