Oil Prices Rebound on Rising Demand

12-Aug-2015 Oil prices rose on Wednesday after the International Energy Agency said demand for crude is increasing at its fastest pace in five years.

The agency’s closely watched oil-market report showed signs that oversupply is significantly smaller than some worst-case scenarios suggest, analysts said. U.S. futures had hit a six-year low Tuesday after China’s currency plummeted in value, which helped raise fears that global demand won't catch up to rampant supply.

“Oil’s plunge below $50 a barrel from triple digits a year ago has seen demand react more swiftly than supply,” the IEA said on Wednesday. Still, the Paris-based agency said the oversupply, which has weighed on oil prices since last year, is likely to persist as global production “continues to grow at a breakneck pace.”

Light, sweet crude for September delivery recently gained 0.8%, $43.43 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained, 0.6%, to $49.46 a barrel on ICE Futures Europe.

Oil prices on Wednesday also found support in the weaker dollar. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, fell 0.8%. Oil is priced in dollars and it becomes cheaper for holders of other currencies as the greenback falls. (by Georgi Kantchev and Timothy Puko, Wall Street Journal)