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Crude oil prices moved slightly higher at the start of trading Wednesday after a monthly report from OPEC showed a slight increase in overall demand.
The Organization of Petroleum Exporting Countries reported total crude oil production in July, according to secondary sources, was 33.1 million barrels per day, an increase of around 46,000 bpd. Iraq posted the largest volumetric increase in production, with declines coming from Libya and Nigeria.
The increase comes amid signs of sluggish growth in the global economy, a situation compounded by European concerns in the wake of the British vote in June to leave the European Union. An over-supplied market in part pushed oil prices down from levels above $100 per barrel in 2014.
OPEC in its monthly market report said it expected global oil demand to average 1.22 million bpd for 2016, a forecast that was 30,000 bpd higher than estimated in the June report. This week, OPEC’s president said demand was expected to increase through the end of the year, though the forecast for 2017 was left unchanged in the July report.
For the global economy, OPEC left its forecast unchanged at 3 percent for 2016 and 3.1 percent for 2017.
Oil prices moved higher at the start of trading after the release of the market report. The price for Brent crude oil was up 0.5 percent to open at $45.22 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was up 0.3 percent to start the day at $42.92 per barrel.
Crude oil prices were volatile in Tuesday trading amid rumors that some members of OPEC may be considering a production freeze, a proposal already abandoned once this year. A short-term market report from the U.S. Energy Information Administration said “major OPEC producers are expected to continue their strategy of maintaining market share.”
EIA said it expected crude oil inventories to build by an average 500,000 bpd in the second half of the year, which it said should put a soft ceiling on any major rally in crude oil prices. It forecast an average price for Brent crude oil for the rest of the year at $43 per barrel.