The International Energy Agency (IEA) increased its growth estimate for global oil demand in 2017 to 1.6 million barrels per day (b/d) from 1.5 million b/d, Economic Times reports.
The agency revised its estimate after demand increased by 2.3 million b/d in the second quarter of 2017, CNBC reports. The IEA predicts that demand will grow by 1.4 million b/d for 2018.
This is the second growth revision of the summer for the IEA. In August, it increased its estimate to 1.5 million b/d from the 1.4 million b/d it had projected in July, according to CNBC.
Despite rising demand, OPEC cut production last month. According to the IEA Oil Market Report, world supply shrank by 720,000 b/d in August. The fall in global supply, according to the IEA, was caused by outages and maintenance in non-OPEC nations.
“Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly,” the IEA predicted.
Oil prices rose on Wednesday after the IEA announcement. Brent crude LCOc1 rose $0.27 to $54.54 a barrel, a 0.5% increase. West Texas Intermediate (WTI) CLc1 rose $0.38 to $48.61, a 0.8% increase.