The IEA said shrinking investment could help the markets to rebalance. That means the organization’s total output of 33.24 million barrels a day in August was 757,000 a day higher than the average amount the world will need from OPEC in 2017. With the price of oil at current levels, you’d would expect supply to contract and demand to grow strongly.
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Kuwait and the United Arab Emirates reached record production numbers, Iraq increased its output, Saudi Arabia neared its all-time peak, and Iran put out the most oil since economic sanctions on it were lifted. Brent crude, the benchmark for Global oil prices, slid 1.22 dollars, or 2.5%, to 47.10 dollars a barrel in London.
Monsanto’s board is set to meet on Tuesday to decide whether to approve a sale to Germany’s Bayer for more than US$65 billion after concluding more than four months of negotiations, Reuters reported, citing people familiar with the matter.
“Recent pillars of demand growth China and India are wobbling”, says the IEA.
After two months of unusual calm on the markets, stocks have see-sawed over the last few days.
This contrasts with the agency’s last forecast a month ago for supply and demand to be broadly in balance over the rest of this year and for inventories to fall swiftly.
Oil has fluctuated since rallying in August amid speculation the Organisation of the Petroleum Exporting Countries and Russian Federation would agree on measures to stabilise the market at a meeting later this month.
THE QUOTE: “Another nail in the coffin overnight, as both OPEC and the International Energy Agency, revised their oil demand figures for 2017 down”, said Jeffrey Halley, senior market analyst at Oanda.
Gasoline stocks fell 2.4 million barrels, building on a drop of 2.3 million barrels in the previous week, while distillates showed a build of 5.3 million barrels. The slowdown in growth is in large part due to falling demand in Asia. US equity markets were down almost 2 percent, extending the bearish sentiment across risky markets.
“As a result, supply will continue to outpace demand at least through the first half of next year”, the IEA concludes.
A stronger dollar also weighed on crude and other commodities denominated in the US unit, making them less affordable to holders of currencies such as the euro.
The trend may fuel speculation of a possible production freeze – aimed at supporting prices – being agreed between OPEC and non-OPEC member Russian Federation at a meeting in Algeria later this month.
Oil and gas companies are pulling the stock market lower as energy prices sink.
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West Texas Intermediate for October delivery lost as much as $1.25 to $45.04 a barrel on the New York Mercantile Exchange and was at $45.26 as of 1:04 p.m. London time. “Demand growth is slowing and supply is rising”.
