Oil prices rose today after International Energy Agency (IEA) forecasts rise in oil consumption by 1.3 million barrels a day (mbpd), with acceleration of economic growth.

According to Reuters, Brent crude increased by 37 cents to $107.10 a barrel, while US crude rose 44 cents to $95.49 a barrel.

Crude prices increased drastically after IEA said that the global oil demand is set to increase more quickly in 2014 with the speeding up of economic growth, outstripping supply even as shale oil production in the US reaches record highs.

IEA said that the world oil consumption would increase by 1.3mbpd in 2014, 50,000bpd higher than previously forecast and economic growth will absorb more supply even as the US shale oil output reaches record highs.

According to IEA Oil Market Report, global refinery crude for the current quarter is to grow by 110,000bpd to 76.8mbpd, with surging US crude runs.

The report also predicts that global throughput will increase 1.3mbpd during the quarter, up from only 0.3mbpd in the last quarter of 2013, with easing up of contraction in Europe and capacity increase in China and Middle East.

The prices also received support from the International Monetary Fund forecast, which predicts that world economy will grow by 3.7% in 2014 and the US economy by 2.8%.

The global forecast is 0.1 percentage point higher and the US forecast 0.2 point higher than the IMF’s October forecast.

Crude was also benefited by the geopolitical tensions in the Middle East and crisis in Syria spilling across the region and disrupting supplies.

Investors are waiting for the American Petroleum Institute’s weekly data which is scheduled late today.

Image: IEA says consumption to increase by 1.3mbpd in 2014. Photo: courtesy of Victor Habbick.

Nri energy