In­ter­na­tional En­ergy Agency cuts oil de­mand fore­cast

Muscat Daily - - BUSINESS -

Paris, France - The In­ter­na­tional En­ergy Agency (IEA) cut its fore­cast for oil de­mand growth on Tues­day, say­ing re­cov­er­ing oil prices and a mild early win­ter were weigh­ing on crude pur­chases.

In a monthly re­port, the Paris­based body said it had re­vised down its de­mand fore­casts for both this year and next by 0.1mn bar­rels per day (bpd). Oil de­mand is now pro­jected to rise by 1.5mn bpd in 2017 and by 1.3mn bpd in 2018, rep­re­sent­ing an­nual in­creases of 1.6 per cent and 1.3 per cent, re­spec­tively.

Crude oil mar­kets are ex­pected to be over­sup­plied in the cur­rent quar­ter and go­ing into 2018, the IEA said.

In­creased oil pro­duc­tion from coun­tries not in the OPEC car­tel had helped push global out­put higher in Oc­to­ber, the re­port said.

Out­put by OPEC alone, how­ever, fell as Al­ge­ria, Iraq and Nige­ria pumped less, tak­ing the car­tel’s pro­duc­tion to its low­est level since May.

Mean­while events in Saudi Ara­bia, OPEC’s king­pin, ‘have added ex­tra mo­men­tum to the rally that has driven Brent crude prices from lows of US$45 per bar­rel in late June to around US$63 per bar­rel re­cently’, the IEA said. Saudi con­cerns added to the im­pact of sup­ply dis­rup­tion in Iraq and lower out­put in Al­ge­ria, Nige­ria and Venezuela to push prices higher. Oil pro­duc­ers who signed up to a land­mark pro­duc­tion cut agree­ment mostly stuck to the deal, with the com­pli­ance rate at 96 per cent in Oc­to­ber, and 87 per cent for the year to date, the IEA also said.

The IEA said ‘sup­ply dis­rup­tions, geopo­lit­i­cal con­cerns, a grow­ing ex­pec­ta­tion that the OPEC/non-OPEC out­put ac­cord will be ex­tended through 2018 at the end of the month, and with de­mand growth still ro­bust, largely ex­plain firmer prices’. Hur­ri­cane Har­vey con­trib­uted to a sharp de­cline in in­dus­try stocks held in de­vel­oped na­tions in the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and Devel­op­ment, the IEA said, adding this con­trib­uted to world­wide oil stocks see­ing a quar­terly de­cline for only the sec­ond time in the past two years.

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