Should Opec fail to make output cuts and production from outside the cartel keeps rising, 2017 could be another year of “relentless” global supply growth, the International Energy Agency said on Thursday. “We can see the scale of the task ahead,” the global energy advisory body said in its closely watched monthly oil market report, writes Anjli Raval, Oil and Gas Correspondent. Opec pumped an unprecedented 33.8m barrels a day in October, well above the target output range it agreed to in its Algiers accord. Production recovered in Nigeria and Libya, while Iraq reached record levels. Saudi Arabia and Kuwait are near all-time highs and Iran has now reached its pre-sanctions rate output.
This means Opec, which is still discussing individual country supply allocations, must agree to significant cuts to turn the commitment into reality, the IEA said. While the IEA said it is not part of its role to encourage any particular course of action, the body issued a warning to Opec should the agreement forged between its members not be implemented. “If the supply surplus persists in 2017 there must be some risk of prices falling back,” said the IEA, which has repeatedly raised the alarm about the impact of the oil collapse on investment into future production.