TOKYO – Oil prices rose in early Asian trade on Tuesday after the head of OPEC forecast a more balanced market next year and the U.S. energy department said domestic production is likely to fall for an eight consecutive month.
U.S. crude rose 19 cents to $44.06 (29 pounds) a barrel by 0104 GMT (2:04 a.m. BST), after falling about 1 percent on Monday to $43.87 for a fourth consecutive decline.
Brent crude, the global benchmark, was up 11 cents at $47.30 a barrel. The contract slipped 0.5 percent on Monday to $47.19 a barrel, also falling for four trading days in a row.
The declines have been driven by mounting evidence of stockpiling, but the comments by OPEC Secretary-General Abdullah al-Badri on Monday provided a bullish tone to the market.
“The expectation is that the market will return to more balance in 2016,” al-Badri said in a speech in the Qatari capital Doha.
“We see global oil demand maintaining its recent healthy growth. We see less non-OPEC supply. And we see an increase in the demand for OPEC crude,” Badri said.
Most of the oil supply increases in recent years have come from high-cost production, Badri said, in a reference to supply sources such as U.S. shale oil.
Shale production is expected to fall for an eighth consecutive month in December, according to a forecast on Monday from the U.S. Energy Information Administration (EIA).
Total output is set to decline by 118,000 barrels per day (bpd) in December, the biggest monthly decline on record, to 4.95 million bpd, the least since September 2014, according to EIA data going back to 2007.
(Reporting by Aaron Sheldrick; Editing by Richard Pullin)
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