“Shutdowns in Nigeria and Canada tightened the oil market markedly and brought supply and demand more closely into alignment earlier than many had expected, bolstering prices”.
Advertisement
The International Energy Agency believes that the price of oil isn’t likely to go above $50/barrel, despite a rise of almost 90% since its thirteen-year low back in January.
“However … the direction of travel seems to be clear”, the IEA said.
Forecasts on oil supplies from non-members of the organization have not changed since 2015 when they amounted to 57.14 million barrels per day.
A stronger dollar overnight spilled over into the oil market, while uncertainty over the outcome of this week’s policy meeting of the U.S. Federal Reserve is keeping the bulls at bay.
The IEA now forecasts that non-OPEC production will fall by 900,000 barrels a day in 2016 and increase by 200,000 barrels a day in 2017.
OPEC member Iran has been ramping up production to its pre-sanctions levels despite the recent supply glut.
“Assuming no further surprises, in second-quarter 2016, we expect the oil market to be balanced, with a small stock draw in the third-quarter to be offset by a small stock build in the fourth quarter”, IEA said Tuesday, Kallanish Energy reports.
It sees daily US oil production falling by 420,000 barrels to 13.57 million barrels.
The report also noted that total motor gasoline inventories decreased by 2.6 million barrels last week-also still “well above the upper limit of the average range”-with both finished gasoline inventories and blending components inventories decreasing last week”. For the entire year, however, the drawdown on inventories is expected to be just 100,000 barrels a day. Iran, now the fastest-growing OPEC member as it restores exports curbed by global sanctions, may boost output by 100,000 barrels a day next year to 3.7 million a day.
United States benchmark West Texas Intermediate (WTI) for July delivery fell 48 cents to $48.01 a barrel on the New York Mercantile Exchange.
Advertisement
“We will see the same rate of growth and global demand will reach 97.4 million bpd”.
