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Page added on June 14, 2016
IEA Sees Global Oil Market Returning To Surplus In Early 2017
Oil supply and demand will balance in the second half of 2016 after a series of unplanned production outages, but the market is expected to tilt into surplus in the first half of next year, the International Energy Agency said on Tuesday.
The agency said demand growth in 2017 is likely to be flat at around 1.3 million barrels per day (bpd), the same level at which it estimates growth for this year, having revised up its May 2016 forecast of 1.2 million bpd.
“Again, on the planning assumption that OPEC oil production grows modestly in 2017, we expect to see global oil stocks build slightly in the first half of 2017 before falling slightly more in the second half of 2017. For the year as a whole, there will be a very small stock draw of 0.1 million bpd,” the IEA said in its monthly report.
“At halfway in 2016, the oil market looks to be balancing; but we must not forget that there are large volumes of shut-in production, mainly in Nigeria and Libya, that could return to the market, and the strong start for oil demand growth seen this year might not be maintained,” the Paris-based agency said.
Most of the anticipated demand growth this year and in 2017 is expected to come from nations that are not part of the Organisation for Economic Cooperation and Development, the agency said.
On the supply side, the IEA said output fell by 590,000 bpd year-on-year to 95.4 million bpd in May, the first significant decline since the start of 2013, as spending cuts and outages cut non-OPEC production by 1.3 million bpd from a year earlier.
Crude output from the Organization of the Petroleum Exporting Countries fell by 100,000 bpd in May to 32.61 million bpd, after a spate of attacks on oil infrastructure in Nigeria offset higher output from the Middle East. Production was still 500,000 bpd higher than in May last year, however.
“Iran has clearly emerged as OPEC’s fastest source of supply growth this year, with an anticipated annual gain of nearly 700,000 bpd,” the IEA said.
3 Comments on "IEA Sees Global Oil Market Returning To Surplus In Early 2017"
makati1 on Tue, 14th Jun 2016 7:37 pm
IEA & RIGPORN! LMAO
shortonoil on Wed, 15th Jun 2016 9:48 am
The value of petroleum to the economy is dependent upon the amount of economic activity it can power. A $1’s worth of oil must be able to generate at least a $1 in the economy. Otherwise, the funds would not exist to buy it. As we have been saying for some time a barrel of oil can no longer drive enough economic activity to acquire the entire barrel. There is a surplus that results, and that appears as excess inventory. This will only grow worse with time.
Excess inventory depresses the price; as the price goes down producers find that a point is reached where they can no longer afford to produce oil. Oil powers the economy, and the economy provides the demand for oil. As oil loses its ability to power the economy because the energy it can deliver is reduced as a result of depletion, the demand for oil will decline. The oil age will end with declining prices, a declining economy, an excess inventory, and a declining demand for oil.
A strictly volumetric perspective for oil production is flawed. Petroleum is one of the world’s most important energy sources. When it can no longer serve in that capacity its use will be discontinued! The Etp Model is a calculation that determines when that will occur.
http://www.thehillsgroup.org/
PracticalMaina on Wed, 15th Jun 2016 12:47 pm
These folks can predict forest fires and attacks on pipelines….impressive.