* Concern rising in OPEC as producers are growing provide and demand isn’t rising
* OPEC to satisfy at finish November to debate manufacturing minimize
* Demand for oil not more likely to decide up subsequent yr
The oil market dangers operating one other surplus in 2017 with out an output reduce from the Group of the Petroleum Exporting Nations (OPEC), as producers across the globe ramp up provide and demand progress falters, the Worldwide Power Company stated on Thursday.
In its month-to-month oil market report, the group stated international provide rose by 800,000 barrels per day in October to ninety seven.eight million bpd, led by report OPEC output and rising manufacturing from non-OPEC members similar to Russia, Brazil, Canada and Kazakhstan.
The Paris-based mostly IEA stored its demand progress forecast for 2016 at 1.2m bpd and expects consumption to extend on the similar tempo subsequent yr, having steadily slowed from a 5-yr peak of 1.8m bpd in 2015.
(OPEC’s job simply turned harder with Trump’s win, discover out why right here)
Time to chop for OPEC and others
OPEC meets on the finish of November to debate a proposed reduce in manufacturing to a variety of 32.5 to 33m bpd, however discord amongst members over exemptions and manufacturing ranges has raised doubt over OPEC’s means to ship a significant discount.
“Regardless of the end result, the Vienna assembly may have a serious influence on the eventual – and oft-postponed – rebalancing of the oil market,” the IEA stated.
“If no settlement is reached and a few particular person members proceed to increase their manufacturing, then the market will stay in surplus all year long, with little prospect of oil costs rising considerably larger. Certainly, if the availability surplus persists in 2017, there have to be some danger of costs falling again,” the company added.
(Oil markets on election day: Learn right here)
The group stated it expects non-OPEC manufacturing to develop at a price of 500,000 bpd subsequent yr, in contrast with a 900,000-bpd decline this yr, which means 2017 might see inventories constructing once more if there isn’t any minimize from OPEC.
“This implies 2017 could possibly be one other yr of relentless international provide progress just like that seen in 2016,” the IEA stated.
Moreover, slower international financial progress and extra modest demand in earlier consumption scorching spots resembling India and China imply general demand for oil will doubtless not decide up subsequent yr, the IEA stated.
“There’s at present little proof to recommend that financial exercise is sufficiently strong to ship larger oil demand progress and any stimulus which may have been offered on the finish of 2015 and within the early a part of 2016 when crude oil costs fell under $30 a barrel is now up to now,” the company stated.
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