Oil edges up as IEA sees higher demand, shrinking inventories

Shell to withdraw from Iraq's Majnoon oilfield

| Updated: October 21, 2017 20:00:52

A worker walks through the Majnoon oilfield in Basra, 420 km southeast of Baghdad. 	— Reuters A worker walks through the Majnoon oilfield in Basra, 420 km southeast of Baghdad. — Reuters

LONDON, Sept 13 (Reuters): Oil prices rose on Wednesday after the International Energy Agency (IEA) said the global oil surplus was starting to shrink due to robust global demand and an output drop from OPEC and other producers.
By 1021 GMT, international benchmark Brent crude LCOc1 was up 27 cents, or 0.5 percent, at $54.54 a barrel.
US West Texas Intermediate (WTI) CLc1 was up 38 cents, or 0.8 per cent, at $48.61 a barrel.
"Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly," the IEA, which coordinates energy policies in industrialised nations, said in its monthly report.
"Demand growth continues to be stronger than expected, particularly in Europe and the US," the IEA said, raising its 2017 global oil demand growth estimate to 1.6 million barrels per day from 1.5 million bpd.
The assessment echoed a report by the Organisation of Petroleum Exporting Countries (OPEC) forecasting higher demand for its oil in 2018 and pointing to signs of a tighter global market.
Another report from Baghdad adds: Royal Dutch Shell is seeking to sell Iraq's Majnoon oilfield and the oil ministry has started preparations to finalize its exit, according to an oil ministry letter and oil officials.
A letter signed by Iraqi oil minister Jabar al-Luaibi and dated Aug. 23 and directed to Shell Iraq Petroleum Development gave approval for Shell to quit Majnoon, an oilfield near Basrah which started production in 2014.
"We respect your desire and decision to seek an acceptable end of Shell Iraq Petroleum Development SIPD's interest in Majnoon," the oil ministry letter said, a copy of which was seen by Reuters. SIPD is Shell's local unit.

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