What IEA report? Oil prices are back above $46

Emma Haslett
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Oil Prices Hit Historic High On Weak Dollar
Oil prices have stabilised around $50 in recent weeks (Source: Getty)

Brent crude oil prices rallied back above $46 this morning, after yesterday's hint by the Saudis that they might take further action to stabilise oil prices.

Brent crude, the international benchmark, climbed 0.87 per cent to $46.44 in early trading in London - although its US counterpart, West Texas Intermediate, was at $43.90, 0.94 per cent higher.

The rally came after Saudi energy minister Khalid al-Falih suggested the Organisation of Petroleum Exporting Countries (Opec) will discuss whether there is a need to stabilise prices at an informal meeting at the end of September.

That came after the International Energy Agency (IEA) had warned global demand for oil was likely to fall by 100,000 barrels per day to 1.2m barrels, thanks to a dimmer economic outlook after the Brexit vote.

Read more: Why oil prices are pushing higher

"The downgrade to demand by the IEA has raised concerns that lower oil prices could well be with us for a little while longer," said Michael Hewson, chief market analyst at CMC Markets UK.

"[That's] great news for consumers, not so much for oil exporters, and oil company share prices that have rallied on the basis that oil prices are on their way back up again.

"This recovery in oil prices has been a welcome respite to those US shale producers who Saudi Arabia decided to take on when they allowed prices to fall below $70 a barrel in 2014, and prompted the run down to $27 a barrel."

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