IEA expects rise in non-OPEC oil output

IEA expects rise in non-OPEC oil output

IEA expects rise in non-OPEC oil output

The IEA projected the oil market would likely tighten throughout the year as non-OPEC oil production, not just in the US, is forecast to increase once again.

"We see the weekly inventory and USA production data being an important oil price driver but it conflicts with the OPEC signals", said Hans van Cleef, senior energy economist at ABN AMRO Bank in Amsterdam. United States production already reached 9m bpd last month after hitting a trough last September of 8.6m bpd. Declines in OPEC production were attributed to output losses in Libya and Nigeria, both of which are exempt from the agreed production cuts, and lower production from Saudi Arabia.

Then in December, non-OPEC producers led by Russian Federation agreed to cut their own output to 558,000 barrels per day.

This means that non-OPEC oil production will soon be on the rise again.

Over the whole of the first quarter, output from OPEC ran at 31.9m b/d, which was 240,000 barrels a day less than the first quarter 2017 "call" on its crude, thus detracting from the inventories that were piling up around in OECD countries following a surge in production in January.

Islamic State loses three quarters of territory it once controlled in Iraq
Over 200 civilians, including women and children were killed in Mosul bu US-led airstrkes. It also holds the city of Raqa and other areas in neighboring Syria.

Crude oil prices were barely in the black early Thursday, with the price for Brent crude oil, the global benchmark, up just 0.18 percent about a half hour before the start of trading in NY to $55.96 per barrel. The net result is that global stocks might have marginally increased in 1Q17 versus an implied draw of about 0.2 mb/d.

The IEA trimmed its oil demand growth forecast for 2017 by 40,000 barrels per day and warned that its revised level of 1.3 million barrels per day "could prove optimistic".

Brent crude traded at around $55.83 a barrel on Thursday shortly after the European open, down 0.04 percent, while US crude was around $53.05 a barrel, down 0.11 percent.

Analysts cited the IEA report and also OPEC's warning yesterday that the cartel's efforts to fight a global glut are threatened by American firms pumping oil with gusto.

The combination of factors could keep a lid on oil prices, which have risen in the past six months after a three-year slump. "We have an interesting second half to come".

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