UPDATE 9-Oil prices rise on dip in U.S. crude stockpiles and IEA data

* Brent, WTI just above $30/bbl, $26/bbl respectively
* IEA sees 5.5 mln bpd crude stocks draw in second half
* CFTC warns brokerages to prepare for volatility ahead of
WTI
contract expiry
* U.S. crude stocks fell by 745,000 barrels last week -EIA
*

(Updates with settlement prices)
By Laura Sanicola
NEW YORK, May 14 (Reuters) - Oil prices settled higher on
Thursday after the International Energy Agency (IEA) forecast
lower global stockpiles in the second half of 2020, although
worries remain that a second surge in coronavirus infections
could occur in coming months.
Crude prices have ticked up in the last two weeks as some
countries relaxed coronavirus restrictions to allow factories
and shops to reopen.
Brent crude futures LCoc1 settled up $1.94, or 6.7
percent, to $31.13 a barrel.
U.S. West Texas Intermediate (WTI) crude futures CLc1
settled up $2.27, or 9%, to $27.56 a barrel.
The market rebounded from Wednesday's losses built on a glum
forecast for the economy from U.S. Federal Reserve Chairman
Jerome Powell, who warned of an "extended period" of weak
economic growth. That offset an unexpected drop in U.S.
stockpiles. EIA/S Initial claims for state unemployment benefits totaled a
seasonally adjusted 2.98 million for the week ended May 9, the
U.S. Labor Department said on Thursday. While that was down from
3.18 million in the prior week and marked the sixth straight
weekly drop, claims remain astoundingly high.
"Gasoline demand correlates pretty well with the employment
level, and it's hard to see gasoline demand come back much more
than it already has," said John Kilduff, partner at Again
Capital LLC in New York.
U.S. crude inventories fell for the first time in 15 weeks,
the Energy Information Administration said on Wednesday, with a
fall in U.S. crude stockpiles of 745,000 barrels to 531.5
million barrels in the week to May 8.
On Thursday, the IEA again forecast a record drop in demand
in 2020, although it trimmed its estimate for the fall, citing
measures to ease lockdowns. IEA/S
As demand increases, the IEA expects crude stockpiles to
shrink by about 5.5 million barrels per day in the second half.
"While these supply and demand dynamics are certainly
capable of boosting prices near term, a potential record level
of global crude supply will remain as a force to be reckoned
with," Jim Ritterbusch, president of Ritterbusch and Associates
in Galena, Illinois, said in a report.
The Organization of the Petroleum Exporting Countries said
on Wednesday it expected 2020 global oil demand to shrink by
9.07 million bpd, a deeper contraction than its previous
forecast of 6.85 million bpd. It said it expected the second quarter to see the steepest
decline. In response, Saudi Arabia deepened its planned cuts for
June, reducing output by nearly 5 million barrels per day.
"The Saudis going from market wreckers to market makers
again and leading by example has sent a very supportive
message," Kilduff said.
The U.S. Commodities Futures Trading Commission warned
exchanges and brokerages on Thursday that they should be
prepared for volatility and possible negative pricing for
certain contracts as expiration approaches next week.


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