Oil price rises on news of higher global demand

Oil prices received a boost this morning as data revealed an increase in global demand over the first half of the year.

 

Yesterday, estimates from the Joint Oil Data Initiative (JODI) showed across 59 countries, which combined account for between 75 and 80 per cent of global consumption, an average of 71.4m barrels were used per day over the six-month period.

 

This was an increase of 3.3 per cent from the 69.1m barrels per day consumed in the first half of 2014, and represents the highest overall demand in five years. 

 

Prices went up this morning in trading following the more positive outlook, with WTI up 77 cents at $45.86 per barrel, and Brent up 60 cents at $48.97 per barrel in early trading.

 

The increase in demand stems from a huge decline in oil prices over recent months, with both Brent and WTI currently trading at around three-quarters of their June values. 

 

This fall, which stems from an oversupply relative to demand, has been exacerbated by the ongoing economic turmoil in China, which is one of the world's biggest consumers of the commodity. 

 

However, the rise has been limited by the simultaneous negative impact of new economic data from Asian markets, with China's manufacturing sector having contracted for the second month in a row in September. In Japan, meanwhile, manufacturers' confidence lost steam in the three months to September.