IEA sees calm global oil market in 2020

London, UK - Global oil markets are likely to remain ‘calm’ next year as soaring production outside OPEC and high inventories keep consumers comfortably supplied, the International Energy Agency (IEA) said.

Supplies outside OPEC - driven by the US, Brazil, Norway and Guyana - will increase by 2.3mn barrels a day in 2020, almost twice the expansion in world oil demand, the agency said in its monthly report.

The growth estimate is about 100,000 barrels a day higher than last month.

Oil prices have remained steady near US$60 a barrel in London for several months, surging only briefly in response to an unprecedented attack on Saudi Arabia’s energy facilities in September. US sanctions on Iran’s exports and political unrest in Venezuela and Iraq have also had limited impact.

‘The calmness is supported by a well-supplied market and high inventories,’ said the Paris-based agency. ‘This may continue into 2020 because non-OPEC countries will grow their production significantly.”

As a result, OPEC - which has cut production this year to prevent a surplus - is currently pumping about 1.7mn barrels a day more than will be needed in the first half of next year, the report showed.

OPEC and its partners will meet on December 5 to 6 to consider next year’s output levels, though they’ve so far indicated little desire to make the deeper cuts that would be needed to avert a new oversupply.

‘The hefty supply cushion that is likely to build up during the first half of next year will offer cold comfort to OPEC+ ministers gathering in Vienna at the start of next month,’ the IEA said. ‘However, a continuously wellsupplied market will lend support to a fragile global economy.’

According to IEA, the calmness is supported by a well-supplied market and high inventories