Baku, Azerbaijan, Dec.13
By Leman Zeynalova – Trend:
Global oil demand growth of 1.4 million barrels per day (mb/d) is foreseen for 2016 and 1.3 mb/d for 2017, the International Energy Agency said in its December Oil Market Report.
If OPEC promptly and fully sticks to its production target and non-OPEC producers deliver the agreed cuts outlined on Dec.10, then the market is likely to move into deficit in the first half of 2017 by an estimated 0.6 mb/d, according to the report.
However, IEA said that this is not a forecast, but an assumption based on the numbers in OPEC’s Nov.30 agreement, subsequently reinforced by the non-OPEC producers.
“After the first half of 2017, the analysis is complicated by the fact that the proposed cut is for six months, and will be reviewed at the next OPEC ministerial meeting at the end of May,” said the report.
“This can be seen as prudent given the underlying uncertainties in the oil market and the global economy but also a warning that production restraint might not be extended.”
As OPEC was deciding to cut production, its crude output in November was 34.2 mb/d, a record high, and 300 kb/d higher than in October, said the report.
Next few weeks are crucial in determining if production cuts are being implemented and if the increase in oil prices will last, according to the IEA.
During the Vienna meeting held Nov.30, OPEC members decided to implement a new OPEC-14 production target of 32.5 million barrels per day.
Later, non-OPEC countries agreed to cut the oil output by 558,000 barrels per day during the meeting held Dec.10.
Eleven non-OPEC countries agreed to reduce the oil output: Azerbaijan, Kingdom of Bahrain, Brunei Darussalam, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Sultanate of Oman, the Russian Federation, Republic of Sudan, and Republic of South Sudan.