IEA sees strong­est global oil-de­mand growth in two years

The Star Malaysia - StarBiz - - Foreign News -

LON­DON: Global oil de­mand will climb this year by the most since 2015, the In­ter­na­tional En­ergy Agency (IEA) said, amid stronger-than-ex­pected con­sump­tion in Europe and the US.

The IEA, which ad­vises most ma­jor economies on en­ergy pol­icy, in­creased its es­ti­mate for de­mand growth in 2017 by 100,000 bar­rels a day to 1.6 mil­lion a day, or 1.7%.

The re-bal­anc­ing of over­sup­plied world mar­kets is con­tin­u­ing, it said, with the Or­gan­i­sa­tion of Petroleum Ex­port­ing Coun­tries (Opec) sup­plies fall­ing for the first time in five months and in­ven­to­ries of re­fined fu­els in de­vel­oped na­tions sub­sid­ing to­ward av­er­age lev­els.

“De­mand growth con­tin­ues to be stronger than ex­pected, par­tic­u­larly in Europe and the US,” the Paris-based agency said in its monthly re­port.

The im­pact of Hur­ri­cane Har­vey, which struck Texas last month, on global oil mar­kets is “likely to be rel­a­tively short-lived,” the IEA said.

Lo­cal stock­piles were at “com­fort­able” lev­els be­fore the storm hit, while re­leases from govern­ment re­serves and plen­ti­ful im­ports from Europe al­layed any short­age.

Oil prices re­main be­low US$50 a bar­rel in New York, less than half the level traded three years ago, as Opec and fel­low pro­duc­ers strug­gle to clear a global glut de­spite cut­ting their out­put for al­most nine months. Still, the IEA’s re­port shows pro­duc­ers are hav­ing some suc­cess in their goal of re­duc­ing bloated oil in­ven­to­ries back to typ­i­cal lev­els.

Stock­piles of re­fined fu­els in de­vel­oped na­tions were close to their five-year av­er­age in July, and could fall to or be­low this level “very soon,” ac­cord­ing to the IEA. Crude oil in­ven­to­ries were steady in the same month, when they typ­i­cally in­crease.

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

Opec im­proved its im­ple­men­ta­tion of the ac­cord to re­duce sup­ply last month, to 82% from 75%. Its 10 part­ners fully de­liv­ered on their pledged cut­backs for the first time since the agree­ment started in Jan­uary, as Rus­sia and Kaza­khstan con­ducted sea­sonal main­te­nance work at oil­fields, the IEA said.

Al­though the oil mar­ket “coped rel­a­tively well” with the dis­rup­tion caused by this year’s storms, the da­m­age to US fa­cil­i­ties will still be felt.

The coun­try’s pro­duc­tion was curbed by about 200,000 bar­rels a day in Au­gust and 300,000 a day in Septem­ber. —


Higher de­mand: A man passes by a poster of an oil-well sta­tion dur­ing the 22nd World Petroleum Congress in Is­tan­bul. The IEA has in­creased its es­ti­mate for de­mand growth in 2017 by 100,000 bar­rels a day to 1.6 mil­lion a day, or 1.7%.

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