Singapore — Oil futures rebounded during mid-morning trade in Asia Friday as lingering supply constraints overshadowed a lower demand growth forecast by OPEC.
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At 10:35 am Singapore time (0235 GMT), November ICE Brent crude futures were up 21 cents/b (0.27%) from Thursday's settle at $78.39/b, while the NYMEX October light sweet crude contract was 27 cents/b (0.39%) higher at $68.86/b.
Prices had dipped Thursday amid profit taking, but even then analysts had noted that the short-term outlook was bullish.
"Prices remain well supported as the market continues to fret about ongoing structural supply issues," analysts at ANZ Bank said Friday.
Risk premiums lingered ahead of the re-introduction of US sanctions on Iran. S&P Global Platts Analytics estimates showed the market could lose around 1.4 million b/d of Iranian crude by November as buyers shift their allocations for fear of breaching US laws.
OPEC's latest survey of production on Wednesday showed Iranian output sliding to 3.6 million b/d in August, a more than two-year low.
Concerns over Libya's oil exports being disrupted by violence have also continued to support global oil prices. The North African country exported almost 900,000 b/d last month, according to a survey by S&P Global Platts.
Investors also remained concerned on demand prospects.
"In an effort to diffuse concern about its struggles to increase production, OPEC warned that there are many threats to oil demand in the short term," the ANZ Bank analysts said.
OPEC lowered its forecasts for year-on-year oil demand growth for both 2018 and 2019 in monthly report this week.
It said world demand will average 98.82 million b/d in 2018, putting year-on-year demand growth at 1.62 million b/d. In 2019, demand will grow 1.41 million b/d to 100.23 million b/d, it added.
A weaker US dollar also supported near-term gains Friday.
As of 0235 GMT, the US Dollar Index was 0.05% down at 94.505.
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