Oil prices rise after IEA, IMF raise forecasts
22 January 2014, 09:14
New York - Global crude oil prices gained on Tuesday after the IMF raised its forecast for global growth in 2014 and the International Energy Agency upped its prediction of oil consumption growth.
The main US contract, West Texas Intermediate for delivery in February, rose 62 cents to finish at $94.99 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for March, the European benchmark, advanced 38 cents to settle at $106.73 a barrel in London trade.
An upbeat forecast from the IEA supported the gains. In its monthly report, the IEA projected demand would grow by 1.3 million barrels per day in 2014, up from a previously forecast increase of 1.2 mbd.
The IEA said oil consumption accelerated at the end of 2013 as advanced economies, led by the United States, saw growth pick up.
"The crude complex is on the move higher after the IEA revised up its demand expectations," said Carl Larry of Oil Outlooks and Opinion.
Larry also highlighted a bullish impulse on the market from the International Monetary Fund's new global growth forecasts, with the upgrade also driven by the advanced economies.
The IMF on Tuesday raised its 2014 growth forecast a tenth point to 3.7%, its first upward revision in nearly two years.
China's move to pump billions into the interbank market further supported the oil market, said Phil Flynn of Price Futures Group. "A splash of cash in China is giving Brent crude a bump", he said.
Oil prices also were benefiting from renewed tensions in Libya, where oil production has been crippled for months amid political protests.
"The expectation of a rapid normalization of oil production in Libya has given way to a more realistic appraisal of the situation," said Commerzbank analyst Carsten Fritsch.