The international energy agency (IEA) raises its forecast for growth in global oil demand this year, while supply has increased in June. Several factors have created concern for the slower rebalansering of the market.
It is clear from the IEA’s monthly report for July, which was published on Thursday.
The IEA expects that the demand amounts to 97,96 million barrels per day on average to 2017 (97,84 in June) and 99,37 million barrels per day on average to 2018 (99,27).
Demand is thus increasing by 1.41 million barrels per day in 2017 and to rise by 1.41 million barrels per day in 2018. It is uppreviderat 0.13, respectively nedreviderat by 0.02 million barrels per day from the previous forecast.
The IEA tracks on that supply from countries outside Opec will be 58.1 million barrels per day on average to 2017 (58,3) and 59,5 million barrels per day on average to 2018 (eur 59.7).
Opec’s increased offer to 32,60 million barrels per day in June, from 32,26 million barrels in February. Libya and Nigeria (both of which are excluded from the settlement if the fall in production) have increased their production, as well as saudi Arabia and (to a lesser extent) Angola.
Global supply increased by 720.000 barrels per day to 97,46 million barrels per day in June, when the producers opened the taps. It is 1.2 million barrels per day more than the corresponding month of the previous year.
The IEA notes that the investors have gone through a period of waning confidence, where prices dropped to levels not seen since november. A general perception is that rebalanseringen of the oil market taking a long time, and where a part requires additional actions from the producers to speed up the process.
Both Libya and Nigeria increased their production by more than 700,000 barrels per day, which suppresses the effect of the anticipated fall in production of 1.2 million barrels per day. First, the compliance with the production agreement declined to 78 per cent in June from 95 per cent in may. While saudi Arabia continues to live up to the promise of reduction so have several other countries have not yet fulfilled their commitments.
”But the contract runs to march 2018 and the success will bedömdas on the basis of the entire period, and not a month,” writes IEA.
It remains to be seen if Opec will make adjustments in the contract and it is also worth noting that compliance among countries outside of Opec has risen to 82 per cent.
Falling prices can also dampen the rise in skifferutvinning in the united states, where some business leaders indicated that an oil price of around 50 dollars per barrel are needed to maintain output growth.
At the same time has the growth in demand increased during the second quarter, but it is too early to determine if this can be the start of a rebalansering of the market during the year.
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