Oil prices rose on Friday supported by expectations of more OPEC production cuts despite the International Energy Agency (IEA) reporting demand growth at its lowest level since the financial crisis of 2008.
Brent crude futures were at $58.07 a barrel, up 69 cents, or 1.2% from their previous settlement.
West Texas Intermediate (WTI) futures were at $53.14 per barrel, up 59 cents, or 1.1%.
“Despite a further cut in oil demand growth by the IEA, oil prices are trading marginally higher, as the demand growth cut was already announced previously by the head of the IEA and the agency still expects larger inventory draws for 2H19,” UBS analyst Giovanni Staunovo said.
The IEA said global oil demand in the first half of 2019 grew at its slowest pace since 2008 hurt by mounting signs of an economic slowdown and a ramping up of the U.S.-China trade war.
Oil prices have lost more than 20% from peaks reached in April, putting them in bear territory.
Rystad Energy said the oil market was going “from gloomy to gloomier”, calling into question the consultancy’s own bullish view for the first part of 2020.
“Economic recession risk and further escalation of the U.S.-China trade war are key concerns in the near term. How long OPEC+ is willing to continue to manage production adds uncertainty,” said Bjørnar Tonhaugen, head of oil market analysis at Rystad Energy.
The Organization of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, agreed in July to extend their supply cuts until March 2020 to boost oil prices.
Saudi Arabia, de facto leader of the OPEC, plans to maintain its crude oil exports below 7 million barrels per day in August and September to bring the market back to balance and help absorb global oil inventories, a Saudi oil official said on Wednesday.
“Market focus in oil has clearly shifted. It is squarely on future demand, rather than on supply,” said Harry Tchilinguirian, global oil strategist at BNP Paribas in London.
The United Arab Emirates also will continue to support actions to balance the oil market, energy minister Suhail al-Mazrouei said in a tweet on Thursday.
The minister said the OPEC and non-OPEC ministerial monitoring committee would meet in Abu Dhabi on Sept. 12 to review the oil market.