Investing.com -- Crude futures closed moderately higher on Tuesday, following a volatile, see-saw day of trading after the International Energy Agency issued a bleak outlook for the next year with forecasts of minimal reductions from record-levels of global oversupply.
On the New York Mercantile Exchange, WTI crude for November delivery traded in a broad range between $46.61 and $48.43 a barrel, before settling at $46.75, down 0.37 or 0.76%. On Monday, U.S. crude futures slumped more than 5% as investors locked into profits from last week's surge. Last Friday, Texas Long Sweet futures soared above $50 a barrel, reaching fresh 11-week highs, amid bullish demand forecasts for 2016.
On the Intercontinental Exchange (ICE), brent crude for December delivery wavered between $49.88 and $51.13 a barrel, before closing at $49.80, down 0.45 or 0.90% on the day. After eclipsing the $54 a barrel level toward the end of last week, brent futures also tumbled more than 5% in Monday's session.
On Tuesday, the Paris-based International Energy Agency said it expects non-OPEC supply to fall by 500,000 barrels per day in 2016, the sharpest decline in two decades. The organization anticipates that non-OPEC production will fall to 57.7 million bpd, amid lower output in the U.S., Russia and the North Sea. Still, the IEA expects the lower production to be partially offset by a 1.6 million bpd supply increase by OPEC in 2016 to 31.3 million bpd.
At the same time, the IEA expects global demand to increase by 1.21 million barrels per day in 2016, down 150,000 bpd from its forecasts last month. The IEA anticipates demand will increase next year thanks to lower oil prices and a strengthening macroeconomic backdrop.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, stood at 94.81 in U.S. afternoon trading, down 0.09% on the session. Earlier, the index slumped to a fresh three-week low below 94.60.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.