LONDON: Oil prices rose as high as $60.65 a barrel on Friday after Iranian media said a state-owned oil tanker had been struck by missiles in the Red Sea near Saudi Arabia, but bearish oil demand forecasts soon pulled crude off session highs.
The Iranian Suezmax crude tanker Sabiti was ablaze and suffered heavy damage after being hit by two missiles, Iranian media reported.
Both oil benchmarks recorded their biggest daily rise since Sept. 16, the first trading day after the attacks on Saudi installations knocked out more than half of the Kingdom’s crude output and temporarily pushed oil prices up by about 20 percent.
International benchmark Brent crude futures were up 98 cents at $60.08 a barrel in early trade before paring gains later in the day.
“The market still has fresh memories of the Saudi Arabia attacks and the very quick price reversals afterwards. The price results of attacks this year have not been sustained in terms of risk premium,” said Petromatrix analyst Olivier Jakob.
Earlier, the International Energy Agency cut its forecast for oil demand growth by 100,000 bpd to a “still solid” 1.2 million bpd.
Rising supply growth from the US, Brazil and Norway would help reduce the demand for OPEC crude to 29 million bpd next year, the IEA said, which could prompt the exporter group to keep restraining supply in 2020.
“The expected crude oil oversupply ... could provide additional support for refining margins,” the report said.
The Organization of the Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, have since January implemented a deal to cut oil output by 1.2 million bpd to support the market.
The pact runs to March 2020 and the producers meet to set policy on Dec. 5-6.
A deeper cut in oil supplies is among options for OPEC and its allies to consider at the gathering, OPEC Secretary-General Mohammad Barkindo said this week.
Saudi Arabia, the world’s top oil exporter, has ramped production back up after the greatest single outage to global supply in modern times, the IEA said.
“Oil markets in September withstood a textbook case of a large-scale supply disruption,” the Paris-based agency said in a monthly report, in a section headed “Business as usual.”
“Prices fell back as it became clear that the damage, although serious, would not cause long-lasting disruption to markets.”