Oil prices rebounded yesterday, buoyed by a fall in US crude inventories, but were still close to multiyear lows as supplies remained abundant and as Opec lowered the demand outlook for its exports.

Brent crude futures were up $1.26 at $37.37 a barrel in afternoon trading, though they slipped later to under $37, while West Texas Intermediate futures were up $1.52 at $37.66.

A day earlier Brent touched $35.98, its lowest since July 2004.

US crude inventories fell 5.88 million barrels to 484.78 million last week compared with a forecast rise of 1.4 million, the Energy Information Administration (EIA) said.

The Organization of the Petroleum Exporting Countries (Opec) in a report yesterday forecast that demand for its crude would be lower in 2020 than in 2016 as rival producers prove more resilient than expected in a low oil price environment.

It forecast 2020 demand for Opec crude at 30.7 million barrels per day (bpd) versus 30.9 million bpd in 2016 and about 1 million bpd less than it is currently producing.

Forecast

Opec raised its forecast for tight oil output to 5.19 million bpd in 2020, up from 4.50 million bpd in its 2014 report.

For the first time in decades, Opec failed to agree on a production ceiling at a December 4th meeting in Vienna.

Saudi King Salman said yesterday the kingdom was concerned about the stability of the oil market, but added that Saudi Arabia remained committed to further exploration activities in the oil and gas sectors.

In a sign of growing competition for market share among Opec members in Asia, Iraq signed a $1.4 billion deal to supply 160,000 bpd to Indian refiners Reliance and Indian Oil Corp.

Although no immediate large-scale exports are expected, some US oil will likely flow into the global market next year. – (Reuters)