UPDATE 7-Oil prices inch lower as demand forecasts reduced, supply rises

UPDATE 7-Oil prices inch lower as demand forecasts reduced, supply rises

Reuters  | Aug 15, 2020 00:00

UPDATE 7-Oil prices inch lower as demand forecasts reduced, supply rises

* OPEC, IEA lower 2020 oil demand forecasts this week
* OPEC+ production rising this month
* No change expected from OPEC+ panel meeting on Wednesday

(New throughout; updates prices, market activity and comments;
changes byline and dateline, previous LONDON)
By Laila Kearney
NEW YORK, Aug 14 (Reuters) - Oil prices edged lower on
Friday as investors feared demand would recover more slowly than
expected from COVID-19 pandemic lockdowns, while rising supply
also overshadowed optimism over falling crude and fuel
This week, two prominent forecasters, the International
Energy Agency and the Organization of the Petroleum Exporting
Countries, trimmed their 2020 oil demand forecasts. IEA/M
OPEC/M OPEC and its allies are increasing output this month.
"Pessimism about this year's oil demand growth prospects is
due to the weakening outlook in the coming months," said Stephen
Brennock of oil broker PVM.
"To make matters worse, global oil supply is on the
Brent crude LCOc1 fell 19 cents, or 0.4%, to $44.77 by
11:38 a.m. EDT (1538 GMT), but still heading for a rise of 0.9%
this week. U.S. West Texas Intermediate CLc1 was down 19
cents, or 0.5%, at $42.05 and was on track for a 2% rise.
Prices had been bolstered this week by U.S. government data
showing crude oil, gasoline and distillate inventories falling
last week as refiners ramped up production and demand for oil
products rose. EIA/S
"If that trend continues, it's very supportive of prices and
should drive prices higher," said Phil Flynn, senior analyst at
Price Futures Group in Chicago.
"What's holding us back on that sentiment is that the market
is still afraid of what is going to happen next with the virus."
Oil has recovered from lows touched in April, when WTI
briefly turned negative. Still, a rise in the number of novel
coronavirus infections has limited gains. India reported another
record daily rise in cases on Thursday.
OPEC and allies including Russia, a group known as OPEC+,
have cut output since May by around 10% of pre-pandemic global
demand to support the market. The deal calls for an increase in
output this month as demand recovers.
An OPEC+ panel meets on Wednesday to review the market.
GRAPHIC: Demand/supply balance https://tmsnrt.rs/3aptIIv
CHART: U.S. oil may retest resistance at $42.89 Brent oil may retest resistance at $45.53 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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