NEOM’s subsidiary plans district cooling plant in OXAGON

LONDON: Oil prices rose by over 1 percent on Thursday after the International Energy Agency raised its oil demand growth forecast for this year as soaring natural gas prices lead some consumers to switch to oil.

Brent crude futures gained $1.29, or 1.3 percent, to $98.69 a barrel by 1348 GMT, while US West Texas Intermediate crude futures rose $1.45, or 1.6 percent, to $93.38.

“Natural gas and electricity prices have soared to new records, incentivizing gas-to-oil switching in some countries,” the Paris-based agency said in its monthly oil report, in which it raised its outlook for 2022 demand by 380,000 barrels per day.

By contrast, the Organization of the Petroleum Exporting Countries on Thursday cut its 2022 forecast for growth in world oil demand, citing the economic impact of Russia’s invasion of Ukraine, high inflation and efforts to contain the pandemic.

OPEC expects 2022 oil demand to rise by 3.1 million bpd, down 260,000 bpd from the previous forecast. However, it still sees a higher overall global oil demand figure than the IEA for 2022.

A rise in US oil inventories last week and the resumption of crude flows on a pipeline supplying central Europe capped further price gains.

US crude oil stocks rose by 5.5 million barrels in the most recent week, the US Energy Information Administration said, more than the expected increase of 73,000 barrels.

Gasoline product supplied rose in the most recent week to 9.1 million barrels per day, though that figure shows demand down 6 percent over the last four weeks compared with the year-ago period.

The premium for front-month WTI futures over barrels loading in six months’ time was pegged at $4.38 a barrel on Thursday, the lowest in four months, indicating easing tightness in prompt supplies.

The resumption of flows on the southern leg of the Russia-to-Europe Druzhba pipeline further calmed market worries over global supply.