High energy prices threaten economic damage, but likely to continue: IEA

Oil prices: IEA, OPEC weigh in with forecasts

Oil prices: IEA, OPEC weigh in with forecasts

Crude oil prices moved higher on Friday, recovering from recent losses, after upbeat exports data from China and the rally in stock markets helped ease concerns about economic slowdown and allay fears about demand growth.

"Our revised demand outlook reflects these concerns". "The demand outlook is hurt right now because of the situation with the USA and China in particular", John Kilduff, a partner at Again Capital Management in NY, told Reuters.

“While there are risks of Middle East conflicts and further outages in production, growing output from the U.S., Saudi Arabia and Russian Federation is likely to keep markets reasonably supplied, ” said Rob Haworth, senior investment strategist at U.S. Bank.

"The decline may deepen significantly ahead of USA sanctions - and subsequently as final cargoes are delivered", said the IEA, which advises major oil consumers on energy policy.

Early in the session, crude rose as global equities were set for their biggest daily gain in almost a month. On Thursday, crude oil futures ended down $2.20, or 3%, at $70.97 a barrel, after having shed 2.4% a session earlier.

Still, the IEA report is the latest government assessment to predict weaker demand ahead and conclude that supply is adequate.

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Crude oil prices recorded modest gains on Friday and the barrel of West Texas Intermediate settled around 40 cents higher at $71.34.

Members of the Organization of the Petroleum Exporting Countries (OPEC) and other exporters such as Russian Federation agreed in June to raise output as the market appeared increasingly tight. "We agreed that high oil prices are hurting consumers and that extra barrels will need to come to the market soon to avoid further tightening", Fatih Birol, executive director of the Paris-based International Energy Agency, said Friday in Twitter.

The price of global benchmark Brent crude has slid over $45 a barrel in June 2017 and peaked at over $85 in October.

This was enough for Stephen Brennock, oil analyst at PVM, to warn that, "The bearish alarm bells are ringing for next year's oil balance as market players brace for the return of a supply surplus".

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Data from Baker Hughes BHGE, +0.62% Friday showed that the number of active USA rigs drilling for oil , which offers a peek at output activity, climbed by 8 to 869 this week.

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