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IEA sees oil glut persisting in 2016 despite soaring demand

A car is filled with gasoline at a gas station pump in Carlsbad, California August 4, 2015. World oil demand is growing at its fastest pace in five years thanks to rebounding economic growth and low prices, but global oversupply is so great that it will last through 2016, the West’s energy watchdog said on Wednesday. The International Energy Agency said in a monthly report that it was steeply raising its demand growth outlook for this year and 2016, and expected non-OPEC supply growth to decline next year, with U.S. producers hardest hit. "While a rebalancing has clearly begun, the process is likely to be prolonged as a supply overhang is expected to persist through 2016 – suggesting global inventories will pile up further," the Paris-based IEA said. The view from the IEA chimes with that of the U.S. government, which on Tuesday lowered U.S. production forecasts, signaling that […]

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IEA Sees Oil Glut Enduring in 2016 After Reaching 17-Year High

The global oil glut will last through next year as surging demand and faltering supply growth fail to clear the surplus, according to the International Energy Agency. Record inventories will expand further even as consumption climbs by the most in five years in 2015 and supplies outside OPEC contract next year for the first time since 2008, the IEA predicted. Stockpiles won’t be diminished until the fourth quarter of 2016, or later if sanctions on Iranian crude are lifted following last month’s nuclear deal, the agency said. “While a rebalancing has clearly begun, the process is likely to be prolonged as a supply overhang is expected to persist through 2016 — suggesting global inventories will pile up further,” the Paris-based adviser to 29 nations said in its monthly report. Oil has slumped to a six-year low near $40 a barrel in New York as OPEC members boost output to […]

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Oil Demand Growing at Fastest Pace in Five Years, Says IEA

Demand for oil is increasing at its fastest pace in five years, boosted by an oil-price drop below $50 a barrel, a top energy watchdog said Wednesday, as it sharply upgraded its consumption-growth forecast for the commodity. But in a blow to the Organization of the Petroleum Exporting Countries’ strategy to defend its market share, the International Energy Agency said lower oil prices would only start to dent rival production next year. In its closely watched monthly report, the IEA said global oil demand would grow by 1.6 million barrels a day this year, an upward revision of 200,000 barrels a day from its previous forecast, and would keep rising by 1.4 million barrels a day next year. The organization—which advises industrialized nations on energy—said consumers were responding to lower oil prices while macroeconomic prospects were better than expected. “Oil’s plunge below $50 barrels a day from triple digits […]

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IEA’s August Oil Market Report

mb/d World Oil Demand *Please note that these Highlights are from the latest Oil Market Report, which is released in full to subscribers only – according to this schedule each month . Non subscribers get free access to the latest Highlights on this schedule, however the full Oil Market Report is released to the public two weeks after the report is released to subscribers. If you would like to receive the full report with accompanying charts and graphs on the day of publication please subscribe or contact the subscription manager . Crude oil prices fell sharply during July and into early August, pressured by an abundance of supply and a strong US dollar. By early August, global benchmarks had sunk around 25% below end June levels. At the time of writing, ICE Brent was trading at around $49 /bbl while NYMEX WTI was at $43.30/bbl. Global oil demand in […]

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Short-Term Energy Outlook

Highlights North Sea Brent crude oil prices averaged $57/barrel (b) in July, a $5/b decrease from June. Brent crude oil spot prices fell further in early August, settling at $48/b on August 7. The recent price declines reflect concerns about lower economic growth in emerging markets, expectations of higher oil exports from Iran, and continuing actual and expected growth in global inventories. EIA forecasts that Brent crude oil prices will average $54/b in 2015 and $59/b in 2016, $6/b and $8/b lower than in last month’s STEO, respectively. Forecast West Texas Intermediate (WTI) crude oil prices in both 2015 and 2016 average $5/b less than the Brent price. The current values of futures and options contracts for November 2015 delivery ( Market Prices and Uncertainty Report ) suggest the market expects WTI prices to range from $34/b to $64/b (at the 95% confidence interval) in November 2015. On July […]

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US EIA projects natural gas inventories to reach second-highest level on record

Increased natural gas use this summer to meet air conditioning demand has not impeded injections of gas into storage, putting gas inventories on track to reach their second-highest level on record by the end of October, the US Energy Information Administration said Tuesday in its monthly outlook. Inventories at the end of July were 23% higher than a year ago and 2% above the previous five-year average for that week at 2.912 Tcf, EIA said in its August Short-Term Energy Outlook. Inventories began the gas refill season in April about 173 Bcf below the five-year average, but record domestic gas production has allowed for strong injections that have kept inventories above the five-year average since the end of May, EIA said. Gas inventories are projected to reach 3.867 Tcf by October 31, the end of the summer refill season. That estimate for end-of-season inventories is 69 Bcf above the […]

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OPEC says cheap oil taking longer to subdue rival suppliers

OPEC on Tuesday raised its forecast of oil supplies from non-member countries in 2015, a sign that crude’s price collapse is taking longer than expected to hit U.S. shale drillers and other competing sources. In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) forecast no extra demand for its crude oil this year despite faster global growth in consumption, because of higher-than-expected production from the United States and other countries outside the group. Oil LCOc1 is trading below $50 a barrel, close to its 2015 low after an 18 percent drop in July. But OPEC has refused to cut output, seeking to recover market share by slowing higher-cost production in the United States and elsewhere that had been encouraged by OPEC’s prior policy of keeping prices near $100. Earlier this year, OPEC slashed its prediction of non-OPEC supply for 2015, expecting lower prices to prompt a […]

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OPEC Pumps at Three-Year High Despite Oil Glut

The return of crude-oil prices below $50 a barrel is testing the unity of the Organization of the Petroleum Exporting Countries, which on Tuesday posted near-record levels of production even as low prices ratchet up pain for its members. In its monthly oil-market report, the 12-nation cartel of some of the world’s biggest oil producers said members pumped 31.51 million barrels a day in July—its highest level since May 2012 and representing an increase of 101,000 barrels a day, compared with the previous month. That is more than 1.5 million barrels a day above the group’s stated output ceiling of 30 million barrels a day—a level OPEC endorsed at its last gathering in June . In the past, OPEC has bolstered prices by restraining output. But in the current downward price spiral, the group has kept pumping, a move aimed at protecting market share, instead of prices. The strategy […]

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