The drop in supply growth comes as upstream investment decreases in response to the current oil glut, the report adds.
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Badri even said OPEC is open to talks with the US, which unlike many other big oil producers doesn’t have a government-run oil company. The agency is referring to the capability of USA shale producers to turn on the crude oil taps as quickly as they were able to shut them down.
Benchmark Brent crude futures were down 9 cents at $34.60 a barrel at 1310 GMT, while US crude futures fell 37 cents to $33.02 a barrel.
In 2014, OPEC refused to play the balancing mechanism in the industry.
Saudi Arabia’s pledge levels may not be as generous as some market observers believe, according to a research note published by the London-based Energy Aspects.
Poorer OPEC members like Nigeria and Ecuador have been clamouring for a cut in production in a bid to stabilise prices, which have plunged to near 13-year lows this month.
Among OPEC nations, Iran is expected to lead in production growth due to the lifting of worldwide sanctions.
The Paris-based organization said it projects Canada to add 800,000 barrels a day of production by 2021, which would bring total output to 5.2 million barrels a day.
Another analyst from Phillip Futures expressed doubt if oil prices could rise further in the absence of concrete measures.
Oil prices eased on Tuesday, eroding some of the previous day’s gains, over doubts a potential production freeze will have any impact on the existing global overhang of unwanted crude.
“There is a lot of uncertainty about the future growth and a lot of headwinds that come for the oil sands”, observed Mrs. Forrest.
“For some time now analysts have tried to understand when the oil market will return to balance”, the MTOMR noted.
The IEA described a “free for all” in the oil market in the medium term. In 2014, crude oil supply exceeded demand by 900,000 bpd. The amount of crude required from exporters’ group will expand to 34.8 million barrels a day by 2021, compared with production of 32.1 million past year, the IEA said. This increasing gap has put pressure on crude oil prices in the past 18 months.
While U.S. production of shale oil is projected to retreat by 600,000 barrels a day this year and a further 200,000 a day in 2017, it will still expand during the period as a whole as growth resumes.
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The IEA’s report pointed to the risk of an oil price spike in the later part of the outlook period (2017 to 2021) “arising from insufficient investment” as many oil producers around the world seek to mitigate low oil prices by cutting costs and closing rigs. “While U.S. light, tight oil output is falling steeply for now, the market will begin rebalancing in 2017 – and by 2021 the United States and Iran are seen leading production gains among non-OPEC and OPEC countries, respectively”, the report said.
