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Oil pares longest weekly loss since '86 as IEA cuts supply view

[LONDON] Oil advanced in New York, paring an eighth weekly decline, as the International Energy Agency lowered forecasts for supplies from outside Opec and said prices could recover.

West Texas Intermediate futures have lost 2 per cent this week, capping the longest run of weekly declines since March 1986. Non-Opec oil producers will increase output this year at a slower rate than previously forecast, aiding a recovery in crude prices, the IEA said in its monthly market report.

"The market is very over-sold and has been looking for signs for a pick-up," Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd, said by phone from London.

"The IEA has very clearly come out and said there will be an impact from price. They've lowered Canada, Colombia production- wise, they've talked about shale as well."

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West Texas Intermediate for February delivery climbed as much as US$1.28, or 2.8 per cent, to US$47.49 a barrel in electronic trading on the New York Mercantile Exchange, trading for US$47.41 at 9:51 am London time. The contract slid US$2.23 to US$46.25 on Jan 15. The volume of all futures traded was about 45 per cent above the 100-day average for the time of day.

Brent for March settlement was US$1.41, or 2.9 per cent higher, at US$49.68 a barrel on the London-based ICE Futures Europe exchange. The February contract expired on Thursday after decreasing US$1.02 to US$47.67. The European benchmark crude traded at a premium of US$1.75 to WTI for the same month.