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Oil steady, tempered by caution over rising U.S. output

Oil steady, tempered by caution over rising U.S. output

Crude has climbed lately to a two-year high around $57 United States a barrel in trading in NY, although it is not seen making much larger gains due to rising USA output.

"The oil market should be able to find a longer-term equilibrium, with the oil price in a range of $50-70 a barrel", the agency said. "Meeting this demand would require an overall investment of around $10.5 trillion across upstream, midstream and downstream operations" Opec Secretary-General, Mohammad Barkindo, said noting that the 2017 outlook was more positive than previous year, partly thanks to oil exporting nations' efforts to stabilise the market. It kept its estimate for this year at 3.08 million bpd. This latest move comes as investors expect figures to show United States oil production has risen. The Organization of the Petroleum Exporting Countries' latest monthly data showed Venezuela reporting production of 1.955 million bpd in October, versus 2.085 million in September.

"The IEA slashing its oil demand growth forecast for this year and the next has dampened some of the bullish sentiment prevailing in the market", Abhishek Kumar, Senior Energy Analyst at Interfax Energy's Global Gas Analytics in London.

"I think this group of committed and responsible producers came together. and I think they will continue to do what it takes to take us to the next level", he said at an global oil conference. Next year, demand is seen hitting 98.9 million bpd, up 1.3 million bpd from this year. Venezuela depends on oil for more than 95 percent of hard currency export revenues, fuelling both social welfare programs and payment on some $60 billion of outstanding bonds.

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"It's quite spectacular, because you're going to see the number of cars on the road double from one billion to 2 billion, thanks to electric vehicles and fuel economy standards", said Laura Cozzi, head of the Energy Demand Outlook division. "Electric vehicles are in the fast lane as a result of government support and declining battery costs, but it is far too early to write the obituary of oil as growth for trucks, aviation, petrochemicals, shipping, and aviation keep pushing demand higher".

After an upbeat performance last week, oil prices edged lower for a second day Tuesday.

Also weighing on the oil price, is the increasing prospect of a slower pace of economic growth in China.

Global demand is forecast to be 30 percent higher by 2040, but still half as much as it would be without efficiency improvements.