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Page added on August 11, 2016

IEA Sees Oil Glut Easing

Global oil markets will continue to re-balance this year as a pick-up in demand from refiners absorbs record output from several Persian Gulf producers, the International Energy Agency predicted.

Refiners around the world will process record volumes of crude this quarter as their intake rebounds after falling in the second quarter by the most since 2009, the Paris-based adviser said in its monthly report. That will shrink brimming crude stockpiles even as Saudi Arabia, Kuwait and the United Arab Emirates pump at all-time highs amid competition between OPEC nations to secure market share, according to the agency.

Rebounding demand will “help pave the way to a sustained tightening of the crude oil balance,” said the agency, which advises 29 nations on energy policy.

Oil’s recovery from 12-year lows reached in January faltered in early June as inventories of both crude and refined fuels remained bloated, demand growth weakened and U.S. oil explorers began to resume drilling. OPEC, which has been pursuing a strategy to maximize its market share rather than defend prices, said it will hold informal talks about how to stabilize prices on the sidelines of a conference in Algiers next month.

Refiners’ crude processing this quarter, known as throughput, will increase by 600,000 barrels a day from a year earlier to a record 80.6 million a day, according to the agency. Throughput sank by 480,000 a day between April and June amid a glut of fuels like gasoline that refiners had churned out earlier in the year while taking advantage of cheap crude prices.

The IEA increased the supply outlook and saw weaker demand growth next year compared with last month’s report.

The agency trimmed forecasts for world oil demand growth in 2017 by 100,000 barrels a day because of a “dimmer macroeconomic outlook,” projecting that consumption will expand by 1.2 million barrels a day to average 97.5 million a day. It also boosted estimates for supplies from outside the Organization of Petroleum Exporting Countries by 200,000 barrels a day as Kazakhstan starts its long-delayed Kashagan project.

Output from OPEC’s 14 nations roses 150,000 barrels a day last month to an eight-year peak of 33.39 million a day. Production in its biggest member, Saudi Arabia, climbed to a record 10.62 million a day as the kingdom raised output to satisfy domestic power consumption, which peaks during the summer with surging air conditioning use.

The kingdom reported an even higher level in its data submission to OPEC for July, at 10.67 million a day, according to a monthly report from the organization published on Wednesday.

Production in Kuwait and the U.A.E. also set new highs in July, at 2.87 million daily barrels and 2.97 million respectively, the IEA reported.

Oil inventories in industrialized nations climbed to a record of more than 3 billion barrels in June as stockpiles of refined products expanded by more than four times the seasonal average, making up for a decline in crude stocks, the agency said.

“The massive overhang of stocks is also keeping a lid on prices,” the IEA said.

Bloomberg

18 Comments on "IEA Sees Oil Glut Easing"

Plantagenet on Thu, 11th Aug 2016 4:26 pm

Both KSA and OPEC as whole are producing record amounts of oil, resulting in a global oil glut. Enjoy the glut while it lasts—-we will see shortages and sky rocketing gas prices just a few more years down the road.

Cheers!

Kenz300 on Thu, 11th Aug 2016 6:31 pm

The sooner we move away from oil and to electric battery powered vehicles the better……….

No more wars for oil…………….

The world needs to speed up the transition away from fossil fuels for a number of reasons……..Wars and Climate Change are two of them……….

Truth Has A Liberal Bias on Thu, 11th Aug 2016 7:26 pm

where you gonna get the energy from to generate your electricity, unicorn farts? And don’t say ‘renewables’! Renewables require fossil fuel inputs; as long as you’re still digging holes to get a traces of copper in a ton of rock you’re not ‘renewable. ‘Renewable’ is a bullshit word. I’ve never met so many retards living in toothfairy land in all my life.

“On average 1 MW of wind capacity requires 103 tonnes of stainless steel, 402 tonnes of concrete, 6.8 tonnes of fiberglass, 3 tonnes of copper and 20 tonnes of cast iron. The elegant blades are made of fiberglass, the skyscraper sized tower of steel, and the base of concrete.”

https://carboncounter.wordpress.com/2015/06/11/can-you-make-a-wind-turbine-without-fossil-fuels-2/

makati1 on Thu, 11th Aug 2016 7:34 pm

Truth, there are a lot of deniers on here who profess not to be, but refuse to look at the total picture. They are only lying to themselves and missing the chance to really prepare for the coming events and lifestyle. Few even think about the lies they are told everyday in all media forms. They just accept them as comforting “facts”. Too bad for them.

makati1 on Thu, 11th Aug 2016 7:37 pm

Kenz, are you willing to quickly change to a 1700’s lifestyle … and income? Have YOU done it? If not, then stop your blathering about ” (a)need to speed up the transition away from fossil fuels”.

shortonoil on Thu, 11th Aug 2016 8:05 pm

Next year refiners will be processing 80.6 mb/d and the industry will be producing 93. That should really improve things!

Rick Bronson on Thu, 11th Aug 2016 8:07 pm

http://www.greencarcongress.com/2016/08/20160805-umtri.html

“average fuel economy (window-sticker value) of new vehicles sold in the US in July 2016 was 25.4 mpg”

Glut is not going to ease.

This is very high and despite the Crossovers and SUVs taking 40% market share, the average fuel economy has increased.

This is because of the turbo engines, improved transmission, Hybrids, Plugins and Electric vehicles boosting the mileage.

Rick Bronson on Thu, 11th Aug 2016 8:09 pm

Mr Makati.
What Kenz300 wrote is correct.

Electric vehicles are expanding at an astonishing pace.

Chinese bought 34,000 Electric vehicles in July-2016 compared to 13,000+ in USA.
http://ev-sales.blogspot.com/

Move away from fossil fuels is happening.

What is your opinion, are you saying that we should stick with fossil fuels for decades to come.

JuanP on Thu, 11th Aug 2016 8:33 pm

Rick, Those numbers are completely insignificant and represent about 1% of the market. Are you aware that China has over a billion people? LOL!

rockman on Thu, 11th Aug 2016 9:03 pm

Boat – “Next year refiners will be processing 80.6 mb/d and the industry will be producing 93.”. So if the oil patch will produce about 12 mm bopd more then the refiners crack next year where do you envision that additional that the extra 4.5 BILLION BBLS OF EXCESS OIL PRODUCTION during 2017 will be stored? That’s about 5X the amount in the US SPR, the largest oil storage system on the planet and more then 50X the total capacity at Cushing, the largest single oil storage facility on the planet.

rockman on Thu, 11th Aug 2016 9:32 pm

According to the IEA globally EV’s currently represent 0.13% of all vehicles on the planet.

Every little bit helps, of course. And EV’s currently certainly do qualify as a little bit today. LOL.

makati1 on Thu, 11th Aug 2016 10:16 pm

Rick you are one of those blind deniers I mention in my comment to Truth. You refuse to see reality and prefer the Koolaid instead. Too bad.

Boat on Thu, 11th Aug 2016 11:08 pm

rockmam,
Boat – “Next year refiners will be processing 80.6 mb/d and the industry will be producing 93.”. So if the oil patch will produce about 12 mm bopd more then the refiners crack next year where do you envision that additional that the extra 4.5 BILLION BBLS OF EXCESS OIL PRODUCTION during 2017 will be stored?”

I don’t know where you got those numbers. Here is the eia for 2016. Production…96.1 mbpy Consumption…95.2

The conclusion is the oil industry doesn’t need to find capacity for 12 mbpd.

rockman on Fri, 12th Aug 2016 5:01 pm

Boat – Your words…not mine: “Next year refiners will be processing 80.6 mb/d and the industry will be producing 93.”

So if they are producing 93 mm bopd and only refining 80.6 mm bopd that means about 12 mm bopd must be going to storage, right? Those are the numbers YOU posted. Don’t ask me to defend your words…that’s your job. LOL.

dissident on Fri, 12th Aug 2016 5:52 pm

Planted Agent, why don’t you prove your claims? Give a reference and numbers showing all this glut in production. I dare you.

Anonymous on Fri, 12th Aug 2016 6:44 pm

Dont hold your breath waiting for that to happen Diss. Plantaglut just likes saying ‘oil glut’ over and over. He doesn’t know what it means, or is supposed to mean, or even if its a remotely accurate statement or not.(its not). He just likes the way it sounds. No different than his ‘Obomber administration’ tropes.

As for providing ‘proof’, well hed likely just point you to this jewberg article that also uses the word ‘glut’ in a context-free manner like plantadope does, and then declare ‘victory’.

Boat on Fri, 12th Aug 2016 8:07 pm

rock,

“Boat – Your words…not mine: “Next year refiners will be processing 80.6 mb/d and the industry will be producing 93.”

Show me where I made any such claim. You are confusing me with somebody else.

shortonoil on Thu, 11th Aug 2016 8:05 pm

“Next year refiners will be processing 80.6 mb/d and the industry will be producing 93. That should really improve things!”

Maybe this is the comment you attribute to me. I would not make a comment like that. I think you took shorts comment and challenged me with it. Why?