The monthly Oil Market Report released by the IEA is closely watched by energy markets… Here are some highlights:
“Each month something seems to come along to raise doubts about the pace of the re-balancing process. This month, there are two hitches: a dramatic recovery in oil production from Libya and Nigeria and a lower rate of compliance by OPEC with its own output agreement.
In the past few months, Libya and Nigeria have seen their combined output increase by more than 700 kb/d. For fellow OPEC members, who agreed to reduce production by 1.2 mb/d, to see their cut effectively diluted by nearly two-thirds must be very frustrating, especially as their pact has, hitherto, been well observed by historical standards.”
“Meanwhile, preliminary indications suggest that global demand growth, after falling to a three-year low of 1.0 mb/d in 1Q17, rebounded to 1.5 mb/d in 2Q17, with strong year-on-year data for the OECD countries as well as in developing economies. Taking demand and supply together, the current market balance implies a global stock draw of 0.7 mb/d in 2Q17.”
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