International Energy Agency (IEA) forecasts balancing of the global oil market in 2018, as consumption growth helps to reduce the three-year surplus from unused fuels and should largely compensate for steep growth in yields. In its monthly report on the oil market, Paris-based IEA says it continues to expect an increase in global crude oil demand of 1.6 million barrels per day in 2017, which will slightly slow down in 2018 to 1.4 million barrels per day.
“Looking at 2018, we see that three of four quarters will be fairly balanced – again based on the assumption that OPEC will not change its production”, says the agency. “In 2018, as a whole, demand for oil and non-OPEC production will increase by approximately the same volume”, adds IEA.
The crude oil trade reserves declined in the third quarter of this year, which is only the second drop since the fall in raw material prices in 2014. The drop is due to a decrease in the volume of oil stored in floating warehouses or transported at the moment. The OPEC trade reserves declined in August by 14.2 million barrels to 3.015 billion barrels, leaving a surplus of 170 million barrels above the 5-year average.
According to the agency, supply of crude oil from non-OPEC countries will increase by 0.700 million barrels per day in 2017 and 1.5 million barrels per day in 2018, reaching 59.6 million barrels per day. The United States will contribute most to this growth.
The International Energy Agency also predicts that crude oil production in the US will grow by 470,000 barrels per day in 2017 and by 1.1 million barrels per day in 2018.
The supply of OPEC remains almost unchanged in September at 32.65 million barrels per day. However, this is still 400,000 barrels per day less on an annual basis, which means the group has executed its quota deal at 88% last month and 86% since its imposition.