* European oil inventories in July were lower than June
* IEA says oil demand growth at lowest since 2008
* For the week, Brent drops 5%, WTI down 2%
* U.S. oil drillers cut rigs for 6th week in row -Baker
Hughes
(Adds speculative trading positions from CFTC)
By Stephanie Kelly
NEW YORK, Aug 9 (Reuters) - Oil prices rose more than $1 a
barrel on Friday, supported by a drop in European inventories
and OPEC output cuts despite the International Energy Agency
reporting demand growth at its lowest since the financial crisis
of 2008.
Brent crude LCOc1 futures gained $1.15, or 2%, to settle
at $58.53 a barrel. U.S. West Texas Intermediate (WTI) crude
CLc1 futures rose $1.96, or 3.7%, to settle at $54.50 a
barrel.
"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," said UBS
analyst Giovanni Staunovo.
The IEA said global oil demand to May from January grew at
its slowest since 2008, hurt by mounting signs of an economic
slowdown and a ramping up of the U.S.-China trade war.
Oil prices rose after Euroilstock data showed total crude
and product inventories of 16 European nations in July were
slightly lower than in June. Yet crude oil prices have lost about 20% from 2019 peaks
reached in April.
For the week, Brent lost more than 5%, while WTI fell about
2%, after markets this week were weighed down by an unexpected
build in U.S. crude stockpiles and on fears of slowing demand
amid the deepening China-U.S. trade war. EIA/S
Despite the weekly decline, hedge funds boosted their net
long U.S. crude futures and options positions in the week to
Aug. 6, the U.S. Commodity Futures Trading Commission (CFTC)
said on Friday.
Russia's energy ministry said the IEA's estimates were
largely in line with its own forecasts and that Moscow had taken
into account the possibility of a slowdown in oil demand when it
extended an output reduction deal with the Organization of the
Petroleum Exporting Countries. Saudi Arabia, de facto leader of OPEC, plans to maintain its
crude oil exports below 7 million barrels per day (bpd) in
August and September to bring the market back to balance and
help to absorb global oil inventories, a Saudi oil official said
on Wednesday. "The Saudis appear to be redoubling their efforts to
constrain global supplies, in response to this week's sell-off,"
said John Kilduff, partner at Again Capital Management.
However, oil production in Russia rose to 11.32 million bpd
on Aug. 1-8, up from 11.15 million bpd on average in July, two
industry sources familiar with the energy ministry data told
Reuters. The level is higher than Moscow's commitment under its
production-curbing deal with OPEC.
OPEC, Russia and other producers, an alliance known as
OPEC+, agreed in July to extend their supply cuts until March
2020 to boost oil prices.
U.S. energy firms this week reduced the number of oil rigs
operating for a sixth week in a row, cutting six rigs and
bringing the total count down to 764, the lowest since February
2018, General Electric Co's GE.N Baker Hughes energy services
firm said on Friday. RIG-OL-USA-BHI <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC-Global oil demand growth https://tmsnrt.rs/2YFYbzG
GRAPHIC-OPEC and non-OPEC supply https://tmsnrt.rs/2MPdnD7
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