LONDON (Reuters) – Global supply and demand for crude oil will be largely balanced next year, as growth in consumption helps erode a three-year-old overhang of unused fuel and should mostly offset a steep rise in output, the International Energy Agency said on Thursday.
In its monthly oil market report, the Paris-based IEA said it continues to see global demand for crude growing by 1.6 million barrels per day in 2017, before moderating to 1.4 million bpd in 2018.
“Looking into 2018, we see that three quarters out of four will be roughly balanced — again using an assumption of unchanged OPEC production, and based on normal weather conditions,” the agency said.
“Taking 2018 as a whole, oil demand and non-OPEC production will grow by roughly the same volume and it is this current outlook that might act as the ceiling for aspirations of higher oil prices.”
Commercial oil stocks likely fell in the third quarter of this year, only the second draw since the crude price crashed in 2014, thanks to a drop in the amount of oil held in floating storage or in transit, the IEA said.
OECD commercial stocks fell in August by 14.2 million barrels to 3.015 billion barrels, leaving a surplus of 170 million barrels above the five-year average, the IEA said.
The IEA said it sees non-OPEC crude supply rising by 700,000 bpd in 2017, and by 1.5 million in 2018 to reach 59.6 million bpd, with the United States being the largest contributor.
The IEA said U.S. crude output is forecast to grow by 470,000 bpd in 2017 and 1.1 million bpd in 2018.
OPEC supply was little changed in September at 32.65 million bpd, but down 400,000 bpd from a year earlier, meaning the group’s compliance with its self-imposed 1.2-million-bpd output cut stood at 88 percent last month and 86 percent for the year to date, the IEA said.Follow us to get the latest updates