Citing the report Reuters wrote that “oil markets will begin to tighten already during the second half of 2016 but process will be slow and painful as global demand growth declines and non-Opec supplies rebound”.
Advertisement
“This expectation of higher crude oil demand in third and fourth quarters of 2016, coupled with decrease in availability is leading the analysts to conclude that the current bear market is only temporary and oil price would increase during later part of 2016”, Sada said.
Members of the Organization of the Petroleum Exporting Countries will meet on the sidelines of the International Energy Forum (IEF), which groups producers and consumers, in Algeria from September 26-28, Qatar’s energy ministry said on Monday.
The oil minister for cash-strapped Venezuela sought to keep alive the prospect of producer action to boost prices, saying on Monday a meeting between OPEC and non-OPEC countries may take place “in the coming weeks”.
“Increasing demand should help control stocks later this year”. After the IEA report today, Brent dropped another 54 cents to US$43.51 a barrel.
After reaching a price of above $52 a barrel in June, Brent crude fell 14.5% in July due to combination of rising stockpiles and worries about the outlook for demand.
“Russia has shrugged off lower prices, worldwide sanctions and financing difficulties to become non-OPEC’s largest source of supply growth”, the report reads. On the positive side, the EIA also reported a draw of 2.8 million barrels in US gasoline stocks for the last week.
Crude oil prices trended lower in the hours before the start of trading in NY, only to turn positive in the opening rounds.
Brent crude, the global benchmark, was trading up 2.34% at $45.08 in London on Thursday afternoon.
Lower oil prices have forced high-cost producers such as the United States to slash spending and reduce drilling, resulting in an expected drop in non-OPEC output of 0.9 million bpd this year.
Official US data on Wednesday showed a jump in crude inventories, taking by surprise investors who expected a draw down in supply, pushing prices of the commodity down by 3 percent overnight.
Advertisement
The global oil demand is expected to be 97.5 mln barrels daily in the next year, the IEA reported. But subdued growth in refining activity and the massive overhang of stocks are keeping a lid on prices, it said. “The market is clearly concerned about oversupply”, said Tamas Varga, analyst at London brokerage PVM Oil Associates.
