Bearish IEA Demand Outlook Could Pressure Prices

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Brent crude futures, the global benchmark for oil prices, were trading at $56.75 per barrel at 0649 GMT, up 14 cents, or 0.25 percent, from their last close.

Yesterday the EIA said it expects US crude oil production in 2018 to rise by more than previously expected.

According to the EIA, crude inventories fell by 2.7 million barrels in the week to October 6 compared with analysts' expectations for a decrease of 2 million barrels. Both benchmarks have risen more than 20 percent from their lows in June as world oil markets tightened. Platts survey showed analysts expecting a draw of 1.4 million barrels in gasoline and a draw of 1.64 million barrels in distillate stocks.

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The market was still under pressure, though, from a bearish outlook by the International Energy Agency, which lowered its forecast for oil demand for 2018.

Angola's oil output recorded a further drop in September, albeit of just 2,900 barrels per day, but widened the gap in relation to Nigeria, which remains the main oil producer in Africa, the Organisation of Petroleum Exporting Countries (OPEC) said.

Traders said they would look to US fuel inventory data on Wednesday and Thursday for indicators on price direction.

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Rising U.S. output is expected to continue to cap upside in crude oil prices, as the EIA forecast total domestic production to average 9.9 million barrels a day in 2018, the highest annual average production in U.S. history.

Gasoline inventories, one of the products that crude is refined into, rose by roughly 2.5m barrels, confounding expectations of a draw of 480,000 barrels while distillate stockpiles fell by about 1.5m barrels, missing expectations of a decline of 2.2m barrels.

The EIA also forecasts USA crude production averaging 9.9M bbl/day in 2018, which would mark the highest annual average production in US history.

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