At the same time, oil supply remains high. Though it is still unclear regarding the timeline of the lifting sanctions, Iran is estimated to have the ability to share up to 800 thousand of barrels per day in the global market in a year.
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“Oil demand growth this year has been disconnected from the fundamental realities of China’s growth trajectory”, Michal Meidan of consultancy China Matters said in a report. Onshore storage space is limited. “Something has to give”. The EIA also found that this year, record road travel will cause gasoline demand to reach 9 million barrels per day, a level not seen since 2007. Global demand will fall, just as OPEC production rises.
Core members of the Organization of the Petroleum Exporting Countries (OPEC) have been pumping strongly for most of the past year in an attempt to regain market share.
OPEC crude supply rose by 340 kb/d in June to 31.7 mb/d, a three- year high, led by record high output from Iraq, Saudi Arabia, and the United Arab Emirates.
Meanwhile it stated global oil output grew by 550,000 barrels a day in June alone, to ninety six. However, ISIS must sell oil at a big discount as it must be sold to buyers on the black market.
The Indian basket of crude oil on the last trading day on Tuesday fell to Dollars 56 a barrel, as China’s stock market-plunge and the Greek crisis revived the spectre of weaker economic growth that could impact oil demand. “Recent developments suggest that the process will extend well into 2016, as shown in our quarterly supply/demand balances for that year”.
The IEA implied what the International Monetary Fund reported recently.
The IEA noted that oil prices will have to decline further in order to reduce the currency supply surplus. Brent North Sea crude for August, the global benchmark, finished at US$58.61 a barrel, a gain of US$1.56 from Wednesday’s settlement.
Indications that talks over Iran’s nuclear program could miss a Friday deadline also provided underlying support for oil, analysts said. About half of that is crude; the other half, condensate. But if sanctions were lifted, it could raise exports immediately out of 40 million barrels now stored on its vessels, the IEA said.
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Non-OPEC supply as a whole, after expanding by a massive 2.4 million bpd in 2014, looks on track to slow to growth of 1 million bpd in 2015 and stay flat in 2016, the IEA said.
