Oil Demand supporting higher prices

[dan_s]

As I have been saying for weeks now, global demand for oil will move higher from Q2 into year-end. This happens every year. This despite all the gloom and doom in the press.

NEW YORK, NY, Jul 19, 2012 (MARKETWIRE via COMTEX) -- Oil stocks received a boost Tuesday as oil prices increased for a fifth consecutive day. A recent report from the Federal Reserve showed that U.S. industrial production increased in June. "The economic data is pretty good and it's painting a better picture for oil demand," Phil Flynn, senior market analyst at the Price Futures Group said on Tuesday.

Last Thursday, the International Energy Agency stated they expect global oil demand to increase by 1 million barrels a day in 2013. In their report the IEA forecasts global oil demand in 2013 will rise 1.1 percent to average 90.9 million barrels a day. While the rise comes as a welcome sign, demand is still "well below" the levels before the financial crisis.

"While the economic risks encompassed in our weaker GDP and demand profile this month also hint at something of a price ceiling, the latent potential of emerging market demand growth and ongoing risk of nasty supply surprises could keep prices stubbornly high in absolute terms," the IEA report said.