IEA sees strongest global oil-demand growth in two years
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%.