Baku, Azerbaijan, Jan. 19
By Khalid Kazimov - Trend:
The International Energy Agency reported that Iran is able to add 500,000 bpd of crude oil to it's production level.
The report, released on Jan.19 on IEA's website, says that Iran, now relieved of sanctions, insists it will boost output by an immediate 500 kb/d.
"Our assessment is that around 300 kb/d of additional crude could be flowing to world markets by the end of the current quarter," said the report.
Iranian government ordered the Oil Ministry to boost oil output by 0.5 mb/d on Jan.18 and add further 0.5 mb/d of oil to production level in the second half of 2016.
Iran currently produces below 2.9 mb/d, about 0.8 mb/d less than pre-sanctions level (2011).
The report adds that as oversupply, mild temperatures and grim economic news affect the growth demand, non-OPEC output falls year-on-year for the first time since 2012.
Exceptionally mild temperatures in the early part of the winter in Japan, Europe and the United States - alongside weak economic sentiment in China, Brazil, Russia and other commodity-dependent economies - added to the global oil demand growth flip from a near five-year high in the third quarter of last year, at 2.1 million barrels per day (mb/d), to a one-year low in the fourth quarter of 1.0 mb/d, IEA said.
"Persistent oversupply, bloated inventories and a slew of negative economic news pressured prices so that by mid-January crude oil touched 12-year lows". The demand growth in 2016 is estimated to reach to 1.2 mb/d.
The report says that global oil supplies expanded by 2.6 mb/d last year, following hefty gains of 2.4 mb/d in 2014. By last December, however, growth had eased to 0.6 mb/d, with lower non-OPEC production that pegged below year-earlier levels for the first time since September 2012.
Global inventories rose by a notional 1 billion barrels in 2014-15, with the fundamentals suggesting a further build of 285 mb over the course of this year.
Despite significant capacity expansions in 2016, this stock build will put storage infrastructure under pressure and could see floating storage become profitable.