The benchmark North American oil futures contract moved above $50 US a barrel on Thursday, buoyed by predictions of growing demand worldwide.

It's the first time since the beginning of August that WTI crude has traded above $50. It hit $50.30 a barrel at midday in New York, before sinking back to $49.89 at the close, a rise of 59 cents. Brent crude, the main international contract, rose to $55.80 US a barrel.

A report from the U.S. Energy Information Administration released Thursday has projected world energy consumption will grow by 28 per cent to 2040.

And while renewables are projected to be the fastest-growing energy source, fossil fuels will continue to be important and demand will grow, even though prices are also projected to rise, the report said.

The EIA report dovetails with a report from the Paris-based International Energy Agency, issued Wednesday, that raised its estimate of 2017 world oil demand growth to 1.6 million barrels per day from 1.5 million bpd.

"OECD demand growth continues to be stronger than expected, particularly in Europe and the U.S.," the report said, noting a rebound in economic growth in both areas.

Total Canadian oil supply is also growing as oilsands production comes onstream despite plunging oil prices and could near 4.95 million barrels per day in 2018, the EIA forecasts.

Impact of Harvey, Irma

Hurricanes Harvey and Irma are projected to slow U.S. oil demand growth in the third quarter, but the disruption from the storms is causing shortages which are expected to be short-term only. The U.S. existing oversupply of crude is expected to be enough to ease shortages.

The IEA says OPEC crude output fell in August for the first time in five months, after renewed turmoil in Libya disrupted flows and other countries met their commitment to pump less, under an agreement reached last November to reduce overall world output.

Natural gas prices also spiked today, to $3.100 on a brighter outlook for gas projected by the U.S. energy administration. They are moving up off decade lows earlier this year. 

The U.S. EIA predicts natural gas will be the fastest-growing fossil fuel in the years to 2040, with global natural gas consumption increasing by 1.4 per cent annually.  The lower carbon intensity of gas will make it preferable to coal and petroleum as countries shift their energy mix because of climate change, but gas is also attractive because of abundant resources and rising production.

In the long term, the share of oil in the world's energy mix will be reduced, to about 31 per cent in 2040, the EIA report predicts. It predicts oil prices will rise and make it more likely energy users will adopt more energy-efficient technologies and to switch away from liquid fuels when feasible.

While OECD demand may be rising this year, the report says China and India will lead the growth in demand for world energy to 2040.

Prediction oil could go higher

Portfolio manager Rob Mark with Raymond James Investment Strategies believes oil could go higher in coming days because of tightening supply.

Not only has OPEC pulled back, but geopolitical events in Venezuela, Iraq, Libya and Nigeria are threatening supply, so the world could soon be pumping less oil than it needs.

"What we said was standing in the way was inventories, but the OPEC cuts are in fact doing their job in terms of putting the globe into a deficit," Mark told CBC News.

"$50 has been a bit of a psychological barrier," he added.

"It's a true resistance number that the traders are paying a lot of attention to. We always thought if you could break through that with a bit of support, then you've got another leg up."