The International Energy Agency (IEA) has released its oil market report for the month, which reveals that the non-OPEC supply could be cut by nearly 0.5mb/d – the largest decline in more than two decades
Oil prices tumbled to a six-year low in August to US$42 a barrel. Lower output in the USA, Russia and North Sea is expected to bring down non-OPEC supply in 2016 to 57.7mb/d. Specifically, US light tight oil is expected to shrink by 0.4mb/d next year, said the IEA report.
OPEC crude supply fell by 220 000 barrels per day in August to 31.57 mb/d, led by declines in Saudi Arabia, Iraq and Angola. The group’s output stood 1.2 mb/d higher than a year earlier. The “call” on OPEC climbs to 31.3 mb/d in 2016, up 1.6 mb/d year-on-year as lower prices dent non-OPEC supply and support above-trend demand growth, stated the report.
Globally, the demand for oil is expected to climb to a five-year high of 1.7mb/d in 2015, before moderating to a still-above trend 1.4mb/d in 2016 mainly due to lower oil prices and a strengthening macroeconomic backdrop.
OECD oil inventories swelled by a further 18mn barrels in July to a record 2,923mn barrels. Robust refinery throughput pushed crude stocks 9.9mn barrels lower, while refined products added 26.7mn barrels, added the IEA report.
At end-July, product stocks covered 31.2 days of forward demand, 0.6 day above end-June. Preliminary data suggest there were further builds in August.
