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Oil holds gains, buoyed by stronger demand

Brent relatively steady following Wednesday forecast of oil stronger demand from IEA

Oil prices steadied on Thursday, holding on to most of their recent gains after forecasts for stronger oil demand by the International Energy Agency (IEA).

Benchmark Brent crude was down 10 cents at $55.06 a barrel by 7:30am GMT, after rising 89 cents or 1.6% on Wednesday. US light crude was unchanged at $49.30 after gaining 2.2% in the previous session.

Wednesday's gains followed an IEA report which raised its estimate of 2017 world oil demand growth to 1.6 million barrels per day from 1.5 million bpd.

Oil continues to gain as forecasts become bullish

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The IEA said a global oil surplus was beginning to shrink due to stronger-than-expected European and US demand growth, as well as production declines in Opec and non-Opec countries.

The supply side of the equation also looks promising, Barclays Research said.

"Unrest in Iraq and Venezuela should keep output there in check, regional crude oil contangos have dissipated, and stocks are gradually declining," it said.

That said, "a softer market balance is in store for next year, which should ensure an Opec/non-Opec deal remains in place beyond March 2018", Barclays added.

Opec and other producers, including Russia, have agreed to reduce crude output by about 1.8 million bpd until next March in an attempt to support prices.

This week's gains came despite US data showing another big build in US crude inventories due to Hurricane Harvey.

Oil dips on reports of rising US stockpiles

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US Energy Information Administration figures showed a build in US crude inventories last week of 5.9 million barrels, exceeding expectations.

US gasoline stocks slumped by 8.4 million barrels, the largest weekly decline since the data began in 1990. US gasoline futures extended declines on Thursday as demand was expected to slip due to the effects of Hurricane Irma on the high-consuming states of Florida and Georgia.

Distillate stocks fell by 3.2 million barrels, the data showed.

Many refineries in the US Gulf are slowly returning to normal as they recover from floods and storm damage.

ExxonMobil said it was restarting its 362,300-barrels-per-day Beaumont, Texas, refinery for the first time since it was shut by Harvey.