By Sara Sjolin and Carla Mozee, MarketWatch
LONDON (MarketWatch) — Benchmark U.S. crude-oil prices retreated from a 15-month high on Thursday after a report from the International Energy Agency said oil supply from non-OPEC countries will rise in 2014.
Crude oil for August delivery CLQ3 -0.46% moved 60 cents lower, or 0.6%, at $105.92 a barrel, slipping from its highest level since March 2012 seen earlier in the day.
The contract had traded as high as $107.45 a barrel, less than 50 cents shy of a 16-month high.
The losses in mid-European trading hours came as the International Energy Agency predicted production from countries outside the Organization of the Petroleum Exporting Countries will rise by 1.3 million barrels a day next year, an annual growth rate that “has only been achieved once in the last twenty years.”
Meanwhile, the organization said global demand is likely to grow 1.2 million barrels a day in 2014. That compares with an upwardly revised forecast for oil demand growth of 930,000 barrels a day this year.
“However, the OECD energy advisor is yet to incorporate the IMF revision of global growth rates. The bottom line is: the supply cushion remains well in place, outpacing relatively modest consumption growth,” said Andrey Kryuchenkov, commodity analyst at VTB Capital.
The International Monetary Fund on Tuesday trimmed its forecast on world economic growth to 3.1% in 2013 and 3.8% in 2014, both 0.2 percentage points lower than the previous estimates.
Earlier in the trading day on Thursday, oil futures added to strong gains from Wednesday’s sessions, when prices rallied $2.99, or 2.9%, to $106.52 a barrel after the U.S. Energy Information Administration said crude stockpiles fell 9.9 million barrels for the week ended July 5. Analysts polled by Platts were looking for a decline of 3.8 million barrels.
Based on the most-active futures contracts, Wednesday’s Nymex settlement was the highest since late March 2012, according to FactSet data.
The EIA data came after the American Petroleum Institute late Tuesday reported a drop of 9 million barrels for last week.
“Both supply and demand currently appear to be in oil’s favor,” with the ongoing conflict in Egypt contributing to supply-side concerns, CMC Markets sales trader Miguel Audencial told clients Thursday. Read: Oil prices could be the next monster under the bed for the economy
Political unrest and deadly violence in Egypt surrounding last week’s ouster of Mohammed Morsi as president have raised concerns about supply disruptions at the Egyptian-controlled Suez Canal and the Suez-Mediterranean pipeline, a key hub for oil producers.
A weaker greenback also helped curb losses for oil, as the dollar extended losses seen after Federal Reserve Chairman Ben Bernanke late Wednesday indicated at an appearance in Boston that the U.S. central bank wouldn’t rush to raise interest rates, even after the unemployment rate reaches the Fed’s target of 6.5%. The dollar DXY -0.14% lost further ground Thursday against its major rivals.
A weaker buck tends to benefit dollar-denominated commodities such as oil as it makes them less expensive for holders of other currencies.
Meanwhile, August Brent oil UK:LCOQ3 -0.22% dropped 42 cents to $108.09 a barrel Thursday. They had climbed on Wednesday by 70 cents, or 0.6%.
Meanwhile, August gasoline RBQ3 -0.79% slipped 3 cent to $2.99 a gallon, while August heating oil HOQ3 +0.04% was flat around $3 a gallon. Both reached $3 on Wednesday for the first time since April.
The EIA said Wednesday that weekly gasoline supplies fell by 2.6 million barrels, while distillate stockpiles, which include heating oil, increased by 3 million barrels. Gasoline stockpiles were expected to rise by 1.2 million barrels, while distillates were forecast to increase by 1.4 million barrels.
August natural gas NGQ13 -0.90% shed 4 cents to $3.64 per million British thermal units. The EIA is due to release weekly data on natural-gas supplies later Thursday. Analysts polled by Platts forecast an increase of between 80 billion cubic feet and 84 billion cubic feet.
