Global demand for oil will grow by 1.2 million barrels per day (bpd) in 2017, down from 1.4 million bpd this year, the IEA said. “Moreover, our crude oil balance indicates a hefty draw in the third quarter after a lengthy stretch of uninterrupted builds”, the IEA report said.
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Saudi Arabia, OPEC’s largest producer, pumped an all-time record high 10.7 million barrels per day in July.
The agency said in a statement that the expected diminishing inventory overhang will cause a sustained tightening in oil market fundamentals, leading to oil prices well above current levels.
Oil prices fell for a third day in Asia trade today after figures showing high United States crude stockpiles and increased Saudi production.
“Increasing demand should help control stocks later this year”.
The Paris-based organization predicted in its Oil Market Report for August that output is likely to lag demand by nearly one million barrels a day from July to September even as OPEC producers pump at record or near record levels. Brent cracking margins were $3.02 per barrel in July (down from $4.85/barrel in June) with Europe’s refining utilisation at 82 percent in June.
North Sea Brent crude LCOc1 was up 10 cents a barrel at $44.15 by 1125 GMT (0725 ET). It reported that USA crude oil inventories rose by 1.1 MMbbls (million barrels) between July 29, 2016, and August 5, 2016.
The cartel has been pumping relentlessly for the last two years, aiming to defend its market share despite the collapsing oil prices.
Production by the Organization of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the de-facto leader, has been boosted by producers such as Iraq and Iran.
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The situation Wednesday was no different, with slight gains in morning trading erased after the U.S. Energy Information Administration reported a gain of 1.1 million barrels of crude oil in storage for the week ending August 5, the third straight week for an increase. In 2017, non-OPEC supply is expected to decline by 0.15 mln barrels daily, following a downward revision of 40,000 barrels a day.
