Both Opec and the International Energy Agency (IEA) see little chance of a tightening world oil market in the remaining six months of this year, as sluggish world oil demand continues to lag behind surging supply from Opec and non-Opec countries alike. But while an expected stalling of North American output growth through 2016 should go some way towards easing the current oversupply in the market, much depends on Opec, the IEA argues: if its members collectively continue to produce at levels well above that required by the market - a trend that is especially likely on the back of this week’s Iran nuclear deal - this will serve only to maintain the downward pressure on world oil prices, and further delay any potential rebalancing of the market.
After growing by a massive 2.4mn b/d in 2014, production growth from outside Opec looks on track to slow to just 1mn b/d this year, and remain flat in 2016, the Paris-based IEA says in its latest Oil Market Report (OMR) - the first to include estimates for 2016. Coupled with oil demand growth of 1.2mn b/d next year, “this makes for a tightening market next year,” the IEA says, forecasting 2016 demand for Opec crude at 30.3mn b/d, up 1mn b/d year-on-year. (CONTINUED - 2215 WORDS)
