Optimism helps to drive up oil price

Brent crude oil was up 56 cents at $59.17 a barrel. So far this month, the international benchmark has lost more than 7 per cent. Front-month US crude futures were trading around 57 cents higher at $53.35 per barrel.

The day’s gains lagged those seen in stock markets, as worries about global demand growth kept oil prices in check.

The International Energy Agency (IEA) said that oil prices are set to come under further pressure from easing global demand and an expanding glut of crude, while a rebalancing of the oil markets may last well into next year.

The IEA, the West’s energy watchdog, said it expected global demand growth to slow next year to 1.2 million barrels per day from 1.4 million this year – far less than needed to balance stubbornly growing non-OPEC and OPEC supply.

“Physical oil market fundamentals remain weak and, in the absence of OPEC production cuts or material supply disruption, this is unlikely to change meaningfully,” Deutsche Bank said.

Top oil exporter Saudi Arabia continues to keep output and export supply high, maintaining fully contracted volumes to Asia in August.