Oil slips on IEA forecast for increased North American output

The fall in the number US oil rigs operating has yet to dent North American output, the world’s energy watchdog said on Friday.

In its latest monthly report the International Energy Agency (IEA) revealed preliminary estimates showing that US crude supplies rose more quickly than expected in December and over the first three months of 2015.

As such, its forecast for North American supplies for the whole year were now higher.

That sent oil futures immediately lower on Friday. As of 14:32 front month Brent crude futures were 1.1% lower at $56.45 per barrel in ICE trading.

On the other side of the equation, oil demand growth has risen steadily since bottoming out in the second quarter of 2014, the IEA said, increasing by 1m barrels of oil a day in the first quarter of 2015.

Meanwhile, traders are watching for further potential supply increases if nuclear negotiations with Iran are successfully concluded at the end of the month.