IEA Forecast | Russell T. Rudy Energy LLC
According to “World Oil”, the International Energy Agency (IEA) predicts that the global oil glut will continue longer than expected. In its most recent report, the agency anticipates stockpiles continuing to build through 2017 as demand growth slumps and several OPEC countries produce at or near record levels.
The fall-off in demand in China and India has been especially damaging. Compounding the problem, last month Saudi Arabia, Kuwait and the United Arab Emirates all produced at their maximum potential and Iraq increased output as well. While non-OPEC production has declined this year, it is expected to increase in 2017 by 380,000 barrels of oil per day (bopd), largely due to Norway, Russia, and the U. S. shale oil industry.
As recently as last month, the IEA had predicted that the global oil market would reach equilibrium by the end of this year. While Russia and OPEC are scheduled to meet in Algiers later this month to discuss a production freeze, many industry observers are skeptical. Even if there is a limit set on output, setting it at near record levels will do nothing to diminish the global glut.
The IEA has cut its demand forecast for next year by 200,000 bopd down to 97.3 million bopd, noting that in addition to decreases in India and China, growth in the developed countries is disappearing. The agency observed that oil inventories in the nations of the Organization for Economic Co-operation and Development (OECD, i.e. developed countries) reached a new record of 3.1 billion barrels in July.
The report concludes, “Demand growth is slowing and supply is rising. Consequently, stocks of oil in OECD countries are swelling to levels never seen before.”
To read the article in its entirety, please go to http://www.worldoil.com/news/2016/9/13/iea-sees-oil-oversupply-persisting-in-2017 .
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