Crude oil futures off the lows after IEA forecasts strong demand

Investing.com - Crude oil futures bounced off the lowest levels of the session on Thursday, following the release of a mostly bullish report from the International Energy Agency on global oil supply and demand earlier in the day.

On the ICE Futures Exchange in London, Brent oil for July delivery hit an intraday low of $65.40 a barrel before recovering to trade at $65.69 during European morning hours, down 1 cent, or 0.02%. A day earlier, London-traded Brent prices tacked on 82 cents, or 1.26%, to close at $65.70.

In its monthly report released earlier in the session, the IEA said that global oil demand is forecast to increase by 1.4 million barrels a day this year, raising its projection from last month by 300,000 a day.

The IEA also said that oil supplies from the Organization of the Petroleum Exporting Countries rose by 50,000 barrels in May from a month earlier to 31.33 million barrels per day, the highest level since August 2012, due to increasing output from Saudi Arabia and Iraq.

Elsewhere, on the New York Mercantile Exchange, crude oil for July delivery shed 21 cents, or 0.35%, to trade at $61.22, moving off a daily low of $61.06.

On Wednesday, Nymex oil prices surged $1.29, or 2.14%, to end at $61.43 after data showed that oil supplies in the U.S. fell for the sixth consecutive week last week.

The U.S. Energy Information Administration said that crude oil inventories fell by 6.8 million barrels last week to 470.6 million, compared to expectations for a drop of 1.7 million barrels to 475.7 million.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, declined by 1.1 million barrels last week, compared to estimates for a drop of 0.8 million barrels.

The report also showed that total motor gasoline inventories decreased by 2.9 million barrels, indicating strong summer demand.

Energy traders have been paying close attention to gasoline stockpiles in recent weeks as the U.S. driving season entered its peak gasoline demand period.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $4.47 a barrel, compared to $4.27 by close of trade on Wednesday.

In the current market, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.55% to 95.10 early on Thursday, moving off overnight lows of 94.30.

The greenback regained some strength after weakening broadly on Wednesday as investors looked ahead to U.S. retail sales and jobless claims data due later in the day for further indications on the strength of the economy and the timing of a future rate hike.