London - Global oil demand will rise more
strongly than expected in 2016 and 2017, although it is too soon
to assess the impact of a joint cut in supply by the world's
largest producers, the International Energy Agency said on
Tuesday.
In its monthly oil market report, the IEA said revisions to
its estimate of Chinese and Russian consumption had prompted it
to raise its forecast for global oil demand growth this year by
120,000 barrels per day (bpd) to 1.4 million bpd, and to lift
its forecast for 2017 by 110,000 bpd to 1.3 million bpd.
The Organisation of the Petroleum Exporting Countries agreed
on Nov. 30 to cut output by 1.2 million bpd to 32.5 million bpd
for the first six months of 2017, together with another 558,000
bpd in cuts from the likes of Russia, Oman and Mexico.
"If OPEC and its non-OPEC partners stick to their pledges,
global inventories could start to draw in the first half of
2017," the IEA said, adding that this was not its own forecast,
but was based on the agreement.
"The deal is for six months and we should allow time for it
to be implemented before re-assessing our market outlook.
Success means the reinforcement of prices and revenue stability
for producers after two difficult years; failure risks starting
a fourth year of stock builds and a possible return to lower
prices," the Paris-based organisation said.
The IEA raised its estimate of Chinese consumption by
135,000 bpd to 11.9 million bpd for 2016, thanks to sharp rises
in imports of mixed aromatics in the first half of this year and
better coverage of the independent, or "teapot" refineries.
The IEA said it had more than halved its forecast for
non-OPEC supply growth for next year to 220,000 bpd, marking a
cut of 255,000 bpd, following the agreement of Russia and 10
other non-OPEC producers to join OPEC's effort to reduce output
and speed up the rebalancing of the market.
The agency said global oil supply rose to a record 98.2
million bpd in November, as OPEC production offset declines
elsewhere.
Non-OPEC oil production fell by 160 000 bpd in November to
57.1 million bpd, while OPEC crude output rose by 300,000 bpd to
a new record high of 34.2 million bpd, the IEA said.
In its last monthly report in November, the IEA warned that
without any sort of cut, 2017 could witness another year of
"relentless supply growth" from non-OPEC producers.
Global crude inventories across the world's richest nations
fell for a third month in a row in October, marking their
longest stretch of declines since 2011, and falling by 74.5
million barrels from July's record 3.102 billion barrels, the
IEA said.