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IEA keeps 2017 global oil demand growth forecast broadly unchanged

The International Energy Agency (IEA) published their latest monthly oil market report on Thursday which said that global oil markets were tightening with demand rising and focus turning toward cuts promised by OPEC and other producers.

The IEA said on Thursday it has kept demand estimates for OPEC crude oil for 2017 steady at 32.9 million barrel per day (bpd) as compared with production of 33.09 million bpd in December. The IEA revised upwards its estimate for global oil demand growth in 2016 and now sees growth at 1.5 mbd, with most of the revision contributed by stronger European demand.

The IEA said that it expects steeper cuts in OPEC oil production this month as producers increasingly implement a recent landmark deal aimed at stabilising oil prices. The Agency however noted that it is too early to judge compliance. The IEA said the output cuts have entered their probation period and it is far too soon to see what level of compliance has been achieved.

"Initial indications are that a steeper (month-on-month) decline may be on the way in January," said the International Energy Agency, which analyses energy markets for major oil consuming nations.

Oil bounced back from one-week low on Thursday after IEA's forecast. Brent crude rose 58 cents, or 1.1 percent to $54.50 a barrel by 0912 GMT after closing down 2.8 percent in the last session. U.S. West Texas Intermediate crude oil was trading up 53 cents at $51.60 per barrel, having dropped to a one-week low on Wednesday at $50.91 a barrel.

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