The market is expected to tighten in the second half of the year, with the EIA forecasting demand to outstrip supply in 2017 (see chart below).
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Data revealed by the American Petroleum Institute highlighted an increase in United States crude stocks by 1.2 million barrels to 536.7 million in the week ending 10 June.
The combination of ongoing militant action in Nigeria and wild fires interrupting oil sands production in Canada drove up oil prices to a 2016 high above $US51 a barrel in May, the third successive month of average prices rises for the main global futures markets.
The IEA said in its monthly report that it expects global crude demand to grow by 1.3 million barrels a day this year and again next year, with buyers encouraged by low prices.
Crude oil futures fell in early Asian trade on Tuesday, as investors ignored signs of market tightness to focus on concerns over global growth and overnight declines in stocks on the impending vote on Britain’s possible European Union exit.
A so-called Brexit will lead to a Europe-wide recession and hit demand for oil, many analysts say.
Non-OPEC production will fall by 740,000 barrels a day from 2015 to 56.4 million barrels a day this year. OPEC pumped 32.36 million bpd last month. Edison’s short-term price forecasts are in line with that of the EIA, which sees Brent crude oil trading at $43 per barrel in 2016 and $52 per barrel in 2017.
The annual oil output of Azerbaijan is expected to decline year over year by 20,000 barrels a day to reach 0.84 million barrels per day, said the report.
But Money Morning Global Energy Strategist Dr. Kent Moors recently outlined five reasons why today’s WTI crude oil price dip won’t last.
The report further reads that non-OPEC oil supply in 2016 is subject to many uncertainties from economic and technical to geopolitical factors.
For 2015, the U.S. Energy Information Administration (EIA) estimates that members of the Organization of the Petroleum Exporting Countries (OPEC) earned about $404 billion in net oil export revenues (unadjusted for inflation).
Non-OPEC output growth is expected to only recover slightly by 200,000 b/d in 2017 after a forecast decline of 900,000 b/d this year, the IEA said.
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Estimated demand for OPEC crude in 2016 at 31.5m b/d was also unchanged versus the previous MOMR and 1.8m b/d higher than past year.
