International Energy Agency sees strongest global oil-demand growth in two years

Rodiano Bonacci
Settembre 13, 2017

The global surplus of crude and stocks over the five-year average fell to 190 million barrels.

Global oil commercial stocks remained unchanged in July 2017 at 3.016 bln barrels versus June.

Oil prices were mixed on Wednesday, dampened by reports of rising USA crude stockpiles but retaining some of the gains made in the previous session after OPEC said it expected higher demand for its crude next year.

"Depending on the pace of recovery for the USA refining industry post-Harvey, very soon OECD product stocks could fall to, or even below, the five-year level", it said referring to Hurricane Harvey which hit the United States two weeks ago.

"Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly". Similarly, OPEC crude in 2018 is estimated at 32.8 mb/d, about 0.2 mb/d higher than in 2017. The re-balancing of oversupplied world markets is continuing, it said, with OPEC supplies falling for the first time in five months and inventories of refined fuels in developed nations subsiding toward average levels.

"It is clear that the rebalancing process is under way, supported by the high conformity levels of OPEC member countries and participating non-OPEC countries to the production adjustments" in the cooperation agreement, OPEC secretary general Sanusi Barkindo said in a speech in Oxford on Monday.

IEA analysts noted that OPEC crude output fell in August for the first time in five months, after renewed turmoil in Libya disrupted flows and others pumped less.

The 12 members of OPEC bound by a supply-cutting pact raised their compliance to 82 percent in August from 75 percent in July. The country's production was curbed by about 200,000 barrels a day in August and 300,000 a day in September.

The IEA the impact of Hurricane Harvey, which struck the US Gulf Coast at the end of August where significant US refinery and export operations are concentrated, on oil markets should be brief.

Although the oil market "coped relatively well" with the disruption caused by this year's storms, the damage to USA facilities will still be felt.

The IEA also raised its forecast for growth in global oil demand after thirst for crude "grew very strongly year-on-year" in the second quarter of this year.

Demand grew by 2.3 million barrels per day (mb/d), or 2.4 per cent, in the second quarter of 2017, prompting the Paris-based organisation to increase its growth estimate for the year to 1.6 mb/d, or 1.7 per cent.

Worldwide benchmark Brent crude LCOc1 was down 13 cents, or 0.2 percent, at $54.14 a barrel, having settled up 0.8 percent in the previous session.

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