* IEA cuts 2011-1016 global oil demand growth
* BP to export U.S. crude to Canada, Shell seeks permit
* Turkey-Syria tensions, lower N.Sea output support
(Updates prices, adds detail; paragraphs 3, 12)
By Alice Baghdjian
LONDON, Oct 12 (Reuters) – Oil fell towards $115 a barrel on
Friday, as a prediction of a further decline in oil consumption
and higher supplies offset concerns about potential output
disruptions in the Middle East.
The International Energy Agency (IEA) said ample supply from
North America and Iraq coupled with declining global demand
could lead to an easing of oil prices over the next five years.
Brent crude was down 56 cents to $115.16 a barrel by
1410 GMT during a volatile session that saw the contract fall to
$114.23 before recovering. U.S. crude was up 13 cents at
$92.20.
The IEA cut its global oil demand growth projection for
2011-2016 by 500,000 barrels per day (bpd) compared to its
previous report, easing the pressure on OPEC to produce more
oil.
It also cut its 2013 global oil demand projection by 100,000
bpd to 90.48 million bpd, citing lower consumption in Europe,
the Americas and China.
“It seems like the market has reacted on the negative side.
Crude oil prices reversed from yesterday’s gains amid concerns
over confirmation of the global oil demand growth,” said Myrto
Sokou, a senior research analyst at Sucden Financial.
“The bearish IEA figures set the tone for the day so we can
expect further declines for today’s trading session,” Sokou
said.
Oil major BP Plc has secured U.S. government
permission to ship U.S. crude oil to Canada, and Royal Dutch
Shell has applied for an export license, as rising
production in the world’s top oil consumer upends global energy
flows.
“This will significantly alter the oil market dynamics in
the coming years as U.S. crude imports are expected to decline
and exports to rise,” said Ryoma Furumi, a commodity sales
manager at Newedge Japan.
But geopolitical risks, lower output in the North Sea due to
maintenance and a supply crunch in oil products are propping up
oil prices in the face of dwindling global fuel demand.
More than a week of rising tension between Turkey and Syria
has stoked fears over potential disruption of oil supply from
the region. The port of Ceyhan, through which more than 400,000
barrels per day of Iraqi crude flows, is on the Turkish
Mediterranean coast.
Turkey scrambled two fighter planes to the border with Syria
on Friday after a Syrian military helicopter bombed the Syrian
border town of Azmarin. Fighting along Turkey’s border with
Syria has repeatedly spilled over into Turkish territory in the
past week.
“At current oil prices, it will not be domestic demand that
will lead oil prices higher on a sustained basis but lack of
supply,” said Olivier Jakob, at Petromatrix in Switzerland.
“This means that we are heading towards a period of greater
volatility, because when and if the fears on supply disappear
there will not be the support of demand,” he said.
Distillate stocks in the United States fell sharply last
week and figures on Thursday showed gasoil stocks independently
held in the Amsterdam-Rotterdam-Antwerp hub fell almost 4
percent week-on-week.
“ARA gasoil stocks in Western Europe are at their lowest
level for nearly a year,” Commerzbank said in a note.
“Distillate prices are therefore likely to rise further ahead of
the heating season.”
(Additional reporting by Florence Tan in Singapore; editing by
William Hardy and James Jukwey)
