The Paris-based think tank lowered its forecast for oil demand growth for next year, saying the rebound in oil prices from their depths at the start of the year had slowed the market’s momentum. The report says: “Global oil supply rose by about 0.8 mb/d in July, as both OPEC and non-OPEC production increased”.
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OPEC increased oil production by 46,400 bpd to 33.11 million bpd in July as compared to June.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September CLU6, -0.53% traded at $41.50 a barrel, down $0.22, or 0.5%, in the Globex electronic session. After prices were hammered at the end of last week on higher investor figures, this week it has emerged that OPEC production reached a new record last month.
“Oil’s drop … has put the “glut” back into the headlines even though our balances show essentially no oversupply during the second half of the year”. Still, the agency attests that global oil supplies increased by 800,000 barrels a day in July thanks to increased output from Organization of the Petroleum Exporting Countries group members as well as producers from outside this group.
The oil price fell in Asia Thursday for a third day after figures showing high USA crude stockpiles and increased Saudi production.
Oil prices fell sharply on Wednesday after data from the US Energy Information Administration showed crude inventories rose 1.1 million barrels in the week ended August 5. It now expects output to average 8.73m barrels a day this year and 8.31m barrels a day next year, up from its previous forecast of 8.61m per day and 8.2m a day, respectively.
“After a steep drop over the past year in US oil production, a recent uptick in the number of rigs drilling for oil is expected to contribute to more steady monthly oil output starting this fall”, said EIA Administrator Adam Sieminski in a statement, reports The Wall Street Journal.
And to compound the misery, today the International Energy Agency issued a report claiming that oil demand growth is set to slow next year. Brent crude oil prices, representing the global benchmark, rose 1.5% to $45.52. Gasoline stocks were down 2.8 million barrels to 235.4 million this week, though 19.9 million barrels higher than the same time in 2015. And with increasing OPEC production-in combination with the most recent United States data-it remains obvious that the global oil market remains oversupplied.
Saudi Arabia, Opec’s largest oil producer, pledged during the last Opec meeting in June that the kingdom would not flood the market with oil.
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This week’s monthly and weekly reports on global and regional oil demand growth and inventories have been piling up on top of rumors – resurfaced and revived once again – that OPEC may try to lift off low crude oil prices with some sort of output freeze.
