The agency said it now believes the global oil market will return to balance in 2017 as demand continues to outpace production. “For the year as a whole, there will be a very small stock draw of 100,000 BPD”, the IEA said. At 95.4 million barrels per day (MMBPD), output stood 590,000 lower than a year ago – the first significant drop since early 2013.
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“In a sense, it is putting some market participants on the sidelines and contributing to the cap on crude oil prices”, Petromatrix strategist Olivier Jakob said.
USA oil production resumed its slide, falling by 29,000 barrels per day, after rising last week.
“The expected improvement in global economic conditions should result in a more balanced oil market toward the end of the year”, the organization’s Vienna-based research department said in a report.
The weak prices are likely to bring in more buyers, with countries like India, South Korea and China expected to drive a lot of fresh demand.
Crude inventories USOILC=ECI fell by 933,000 barrels in the last week, the U.S. Energy Information Administration reported, less than half the 2.3 million barrel decrease expected by analysts. OPEC forecasts supply from outside producers will decline by 740,000 bpd in 2016 led by the United States, unchanged from last month.
Also, Britain’s Brent North Sea crude for delivery in August was down 52 cents at $49.83 a barrel.
Gasoline refining margins on both sides of the Atlantic have fallen since the start of June, as inventories have grown at a time when demand tends to be at its highest for the year.
Crude oil futures fell in 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.
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.
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After nearly doubling from February to touch multi-month highs last week, oil tumbled along with equities markets on worries about the global outlook and Britain’s European Union future.
