IEA says hopes of higher, stable oil prices could be dashed quickly

IGU Logo

IGU Logo

The International Energy Agency's forecast on demand have been abysmal and now once again they are low balling demand at least compared to OPEC which says that said oil use would grow faster than previously thought due to a stronger-than-expected world economy.

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014.

Paris-based IEA predicts that US shale oil producers will boost their output by 8 million barrels a day between 2010 and 2025, an increase that "would match the highest sustained period of oil output growth by a single country in the history of oil markets" - rivaling even the massive increase posted by Saudi Arabia between 1966 and 1981. The effort, which started in January, is credited with pulling the price of oil back from the sub-$30 per barrel range last year to two-year highs in recent sessions.

"However, if these problems do prove to be temporary, a fresh look at the fundamentals confirms the view we expressed last month that the market balance in 2018 does not look as tight as some would like, and there is not in fact a "new normal".

On the other hand OPEC demand for their oil is up to 33.42 million barrels per day (bpd) of OPEC crude next year, an increase of 360,000 bpd from its previous forecast and the fourth consecutive monthly increase in the projection from its first estimate made in July.

IEA said it had cut its longer-term oil price projections from past year, partly because of the falling cost of both renewable and conventional sources of energy, the worldwide push to tackle climate change and improve air quality and the boom in United States shale oil and gas output.

Oil producers who signed up to a landmark production cut agreement mostly stuck to the deal, with the compliance rate at 96 percent in October, and 87 percent for the year to date, the IEA also said.

The biggest threat to market balances, aside from a tempering in demand, is the growth in supply from non-OPEC nations.

"Using a scenario whereby current levels of OPEC production are maintained, the oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 600,000 bpd followed by another, smaller, surplus of 200,000 bpd in 2Q18", the agency said.

However, even rapid growth in the electric vehicle fleet would be unlikely to have a substantial impact on oil consumption for passenger transport until the mid-2020s, it said.

Growth is expected to accelerate to 1.4 million bpd in the last three months of this year, even though mild temperatures and rising prices will restrain demand, the IEA said.

Notícias recomendadas

  • British MPs warn of 'catastrophic' customs failure after Brexit

    British MPs warn of 'catastrophic' customs failure after Brexit

    If the CDS is "not ready in time and if there is no viable fall-back option", it would be "catastrophic", the cross-party committee concluded.

    Moody Lynn & Lieberson LLC Purchases New Holdings in Heico Corporation (HEI)

    Dupont Capital Management Corp's holdings in Heico Corporation were worth $648,000 at the end of the most recent reporting period. The aerospace company reported $0.53 earnings per share for the quarter, topping analysts' consensus estimates of $0.52 by $0.01.
    Saad Hariri bientôt de retour au Liban

    Saad Hariri bientôt de retour au Liban

    Il convient de rappeler que Saad Hariri avait présenté sa démission depuis Riyad, capitale de l'Arabie Saoudite , ce 4 novembre. Les journalistes, notamment libanais, n'ont pas été autorisés à assister à cette rencontre.
  • RAW established special cell to sabotage CPEC: CJCSC

    RAW established special cell to sabotage CPEC: CJCSC

    These moves of India can result in a major war at any time, General Zubair said. "The festering Kashmir issue runs the risk of the outbreak of nuclear war in the region".
    Xbox One X Sells 80000 in the UK During First Week

    Xbox One X Sells 80000 in the UK During First Week

    Just in time for the holidays and Xbox's annual Black Friday sale , game gifting from the store is now available to the public. Xbox is also advertising $20 off select games and 35 percent off family friendly titles from the 23rd through the 27th.
    New Zealand Prime Minister: Barong scratchy, 'quite starched'

    New Zealand Prime Minister: Barong scratchy, 'quite starched'

    The Philippines and New Zealand signed an amendment to extend geothermal energy cooperation . This, as it committed to spur the development of the country's geothermal output.
  • New research shows rent is at an all time high in Dublin (again)

    New research shows rent is at an all time high in Dublin (again)

    In the county, rental prices are up more than 14 per cent since previous year , with the average rent being 751 euro. Further increases where seen in Cork (five per cent), Galway (nine per cent) and Limerick (10.9 per cent).

    Boston Scientific Corp (BSX) Shares Hovering Above Chikou

    The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website . Janus Henderson Group PLC lifted its stake in shares of Boston Scientific Corporation by 22,491.6% in the second quarter.
    Apple préparerait de nouveaux iPhone pour 2018

    Apple préparerait de nouveaux iPhone pour 2018

    Ainsi, la version 6, 5 pouces aura 480 à 500 ppp et la version 6,1 pouces (l'écran LCD) aura 320 et 330 pixels. Les deux versions doteront d'une dalle OLED et la dernière version d'un écran LCD de 6,1 pouces.
  • United Nations  rights chief: European Union  policy on migrants in Libya 'inhuman

    United Nations rights chief: European Union policy on migrants in Libya 'inhuman

    He called for the creation of domestic legal measures and the decriminalisation of irregular migration to ensure the protection of migrants' human rights.
    Russian PM Medvedev met US Trump, calls him 'open and well-meaning': RIA

    Russian PM Medvedev met US Trump, calls him 'open and well-meaning': RIA

    Duterte also thanked Medvedev for considering to allow the Philippines to exhibit Filipino products in Russian Federation . Anastasia Novopashina, meanwhile, was arrested at NAIA after Customs officials found in her possession high-grade cocaine.
    Dick's Sporting Goods warns on margins

    Dick's Sporting Goods warns on margins

    The purchase was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website . TRADEMARK VIOLATION NOTICE: This news story was posted by Dispatch Tribunal and is the sole property of of Dispatch Tribunal.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.