The International Energy Agency raised its forecast for global oil demand growth after the summer heatwaves in Europe and tight natural gas supplies prompt more oil use for power generation.
The Organization of the Petroleum Exporting Countries was expected to release its monthly report later Thursday morning.
The IEA said high prices and limited supplies of natural gas in Europe have pushed power plants and heavy industries to look for oil as an alternative fuel source after Russia has cut energy exports to the region. The Paris-based IEA said the trend would result in additional oil-demand growth of 380,000 barrels a day in 2022, with the agency lifting its oil-demand growth forecast by 2.1 million barrels a day.
Oil ended up with gains Wednesday after the Energy Information Administration said U.S. crude inventories jumped 5 million barrels in the week ending August 5, while gasoline supplies fell 5 million barrels and distillate supplies rose 2.2 million barrels. On average, analysts had predicted a 600,000 barrel rise in crude inventories, a 1.2 million barrel drop for gasoline and a 900,000 barrel fall for distillates.
With rising gasoline inventories in recent weeks, a retreat in gasoline futures and pump prices has resulted in a sharp retreat from all-time highs for gasoline futures and pump prices, with tracking services showing the average U.S. gasoline price falling below $4 a gallon this week.
WTI is back above $90, but that could change if progress is made on the Iran nuclear deal. Craig Erlam, senior market analyst at Oanda, said it has seen a lot of support around $87-88 over the last month, as the tight market continues to keep the price very elevated.
The European Union on Monday presented what it described as its final text for restoring the 2015 nuclear accord with Iran, signalling that it was up to Tehran to take or leave it. Iranian officials said they would make further points at a later date, and that they gave an initial response to the draft.
A criminal complaint was unsealed Wednesday that a Iranian national plotted to kill former National Security Adviser John Bolton and another official in retaliation for a U.S. strike that killed Iran's most powerful general.