In Oil & Companies News 11/08/2016
The International Energy Agency on Thursday trimmed its forecast for the rise in global oil demand next year on a dimmer economic outlook, warning that the “massive” stock overhang is keeping a lid on crude oil prices.
In its closely watched monthly oil market report, the Paris-based energy watchdog said it expects global oil demand to grow by 1.2 million barrels a day in 2017, a decrease of 100,000 barrels a day compared with last month’s forecast and down by 200,000 barrels a day from this year.
“Some momentum will be lost in 2017 due to downgrades in economic growth projections, but the forecast expansion of 1.2 million b/d is still above-trend,” it said in the report.
Despite recent price drops, balances in the market show essentially no oversupply during the second half of this year. But subdued growth in refining activity and the massive overhang of stocks are keeping a lid on prices, it said.
Commercial stocks of oil in countries belonging to the Organization for Economic Cooperation and Development, OECD, increased by 5.7 million barrels in June and stood at a record 3.093 billion barrels by the end of the month, the IEA said.
The agency said that global oil supplies rose by 800,000 barrels a day in July on higher output from members of the Organization of the Petroleum Exporting Countries and producers outside the group.
OPEC, which now has 14 members since Gabon joined in June, saw its output rise 150,000 barrels a day in July, reaching an eight-year high of 33.39 million barrels on higher production from Saudi Arabia and Iraq.
Saudi Arabia ramped up to a record rate of 10.62 million barrels a day, while Iraqi crude production rose by 80,000 to 4.33 million barrels a day.
Source: WSJ
