Oil steady as demand worries offset China, Greece optimism

LONDON | By Simon Falush

A man (R) refuels his motorcycle at an Aegean Oil gas station in Athens February 10, 2015.

Reuters/ Alkis Konstantinidis

Oil prices steadied on Friday as worries about oversupply and slowing demand offset support from a rebound in Chinese stock prices and hopes of a breakthrough in the Greek debt crisis.Brent crude oil LCOc1 was up 7 cents at $58.68 a barrel by 1254 GMT (8:54 a.m. EDT). So far this month, the international benchmark has lost more than 7 percent.
Front-month U.S. crude futures CLc1 were trading 9 cents higher at $52.87 per barrel.
Oil's flat performance contrasted with a rally in other global financial markets, which drew support from hopes a deal would be reached soon to keep Greece in the euro and a rebound in Chinese equities, which had fallen sharply.
The International Energy Agency (IEA) said on
Friday that oil prices are set to come under further pressure from easing global demand and an expanding glut of crude, while a rebalancing of the oil markets may last well into next year.

The IEA, the West's energy watchdog, said it expected global demand growth to slow next year to 1.2 million barrels per day from 1.4 million this year - far less than needed to balance stubbornly growing non-OPEC and OPEC supply.
"Physical oil market fundamentals remain weak and, in the absence of OPEC production cuts or material supply disruption, this is unlikely to change meaningfully," Deutsche Bank said in a note.
Greece has put a cash-for-reforms proposal in front of creditors, raising the possibility that a deal could be reached this weekend.
In China, the CSI300 .CSI300 stock index closed more than 5 percent higher, extending gains from the previous session after a barrage of government support measures aimed at halting a 30 percent fall in share prices since June.
The plunge in Chinese shares, along with concerns about Greece, helped send Brent as low as $55.10 earlier this week.
Data from China as well as the IEA figures capped oil's gains. Auto sales there dipped for a third straight month, falling 2.3 percent in June from a year earlier, prompting a halving of its annual sales growth forecast to 3 percent.
Traders were waiting to hear whether a compromise would be reached between world powers and Iran that could lead to increased oil flows if nuclear-related sanctions are lifted, although Washington said it was in no rush to reach a deal.
Top oil exporter Saudi Arabia continues to keep output and export supply high, maintaining fully contracted volumes to Asia in August.