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Oil futures rose Wednesday, buoyed after the International Energy Agency raised its forecast for demand growth in the year ahead.

Price action
  • West Texas Intermediate crude for January delivery



    rose 86 cents, or 1.1%, to $765.25 a barrel on the New York Mercantile Exchange.

  • February Brent crude

    the global benchmark, was up 86 cents, or 1.1%, at $81.54 a barrel on ICE Futures Europe.

  • Back on Nymex, January gasoline

    rose 0.8% to $2.177 a gallon, while January heating oil

    was up 2.3% at $3.164 a gallon.

  • January natural gas

    dropped 5.1% to $6.583 per million British thermal units.

Market drivers

The Paris-based International Energy Agency on Wednesday raised its forecast for oil-demand growth for 2022 by 140,000 barrels a day to 2.3 million barrels a day. For 2023, the IEA also lifted its demand growth forecast by 100,000 barrels a day to 1.7 million barrels a day.

The IEA said a better-than-expected response to Europe’s energy crisis and surprising economic resilience among major Asian economies are boosting demand for oil as a heat source. The Organization of the Petroleum Exporting Countries on Tuesday left its forecasts for growth in oil demand this year and next unchanged. OPEC expects demand to grow by 2.5 million barrels a day in 2022 and by 2.2 million barrels a day in 2023, unchanged from its November forecast. 

“There remains immense uncertainty over the outlook for crude demand and supply which is leading to plenty of volatility in oil markets,” said Craig Erlam, senior market analyst at Oanda, in a note.

“The price has rebounded in recent days after WTI fell close to $70, the level at which the White House has previously indicated it will start refilling the SPR following a year of repeatedly drawing it down,” he said.

Meanwhile, the American Petroleum Institute late Tuesday said U.S. crude inventories rose by 7.8 million barrels last week, according to a source citing the data. Gasoline inventories rose by 877,000 barrels, while distillates were up 3.9 million barrels, according to the source.

Official data from the Energy Information Administration is due Wednesday morning. Analysts surveyed by S&P Global Commodity Insights, on average, look for crude stocks to fall by 3.5 million barrels, while gasoline supplies were seen up 3.2 million barrels and distillates up by 2.5 million barrels.

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