GLOBAL OIL SURPLUS SHRINKS ON RISING DEMAND

IEA expects global growth estimate to increase to 1.6m bpd

LONDON energy policies of industrial nations, raised its this year’s global oil demand growth estimate to 1.6 million barrels per day (bpd) from 1.5 million bpd.

“Organisation for Economic Co-operation and Development (OECD) demand growth continues to be stronger than expected, particularly in Europe and the US,” said the Paris-based IEA.

“Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly,” said the IEA.

Robust demand in industrialised countries was a key factor behind global demand growing 2.3 million bpd in the second quarter, the highest quarterly year-on-year rise since mid2015.

On the supply side, global oil output fell 0.72 million bpd last month due to unplanned outages and scheduled maintenance in Opec member Libya and nonOpec states such as Russia, Kazakhstan, Azerbaijan and Mexico and the North Sea.

It was the first fall in global production in four months.

Opec’s crude output fell last month for the first time in five months on renewed turmoil in Libya, with its production decreasing by 0.21 million bpd to 32.67 million bpd.

The 12 members of Opec bound by a supply-cutting pact raised their compliance to 82 per cent last month, from 75 per cent in July. Their compliance for the year so far was 86 per cent.

As a result of output declines and stronger demand, global oil stocks are beginning to rebalance, according to the IEA.

“OECD commercial stocks were unchanged in July at 3.016 billion barrels, when they normally increase,” said IEA. Reuters