iea ‘enormous’ inventories to keep lid on oil price
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

IEA: ‘Enormous’ inventories to keep lid on oil price

Arab Today, arab today

Arab Today, arab today IEA: ‘Enormous’ inventories to keep lid on oil price

IEA: ‘Enormous’ inventories to keep lid on oil price
Paris - Arab Today

A huge overhang in oil stocks lingering across the world will keep a cap on any further oil price rises, the IEA said, even as supply and demand move toward balance by the end of the year.

Global demand for oil is steadily rising thanks to solid economic growth, and supply has been curbed by unexpected production cuts due to wildfires in Canada and rebel attacks in Nigeria, as well as falling US shale production, the International Energy Agency said in its monthly oil market report.
These factors recently pushed the oil price above the key level of $50 as supply came closer to matching demand, a process known as rebalancing which the IEA expects to be fully in place in the second half of this year.
But while market forces play out to help the oil price to continue climbing from its low point of close to $25 at the start of the year, there are still large oil inventories waiting to feed into the market, causing a supply glut that is likely to keep a lid on gains for some time.
“There is an enormous inventory overhang to clear,” the IEA said. 
“This is likely to dampen prospects of a significant increase in oil prices.”
Worries about big stocks have caused the oil price to fall back from this year’s high of around $51 reached early last month, the agency said, echoing Monday’s report from the OPEC oil cartel which said that “speculators became somewhat less interested in long positions” because of the overhang in inventories.
The benchmark Brent crude contract lost ground Tuesday, slipping to $49.65 in early afternoon European business while US’s WTI contract eased to $48.19.
“Oil prices are due a short-term breather given the recent run up, as the market takes stock of broader macroeconomic developments,” analysts at Energy Aspects said.
The IEA said there is a “huge number of moving parts” in the current oil market environment, making accurate predictions hazardous.
On the supply side, these involve a surprisingly strong return of Iran to the oil market after Western countries lifted sanctions which had been imposed over Tehran’s nuclear program, and questions over the timing of any full resumption of production in Nigeria once Niger Delta security issues are resolved.
Iran has emerged as “OPEC’s fastest source of supply growth this year,” pumping oil at its highest level in five years, the IEA said.
OPEC, meanwhile, has done little to correct the market’s imbalance, failing earlier this month to agree on any production ceiling at a key meeting and deciding instead to keep oil gushing as the moderate recovery in the oil price eased pressure to limit output.
Kingpin Saudi Arabia said at the time that the cartel was “very satisfied” with the market.
This stance had at least “provided some clarity to the market,” the IEA observed in its report.
On the demand side, the IEA said relatively weak oil prices will bring more buyers into the market, leading the agency to raise its forecast for 2016 demand growth to 1.3 million barrels per day (mbpd) from a previous 1.2 mb/d estimate.
Countries outside the OECD club of highly-developed nations will provide the bulk of fresh demand, with India the world’s growth leader, the IEA said.
Korea and China are also projected to see strong demand.
Following weakness since late last year, demand in the US has picked up in recent months and will make a “vigorous” contribution to demand growth, it said.
Worldwide oil demand is likely to continue to grow by 1.3 mb/d into next year, the IEA said, in its first estimate for 2017.

Source: Arab News

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

iea ‘enormous’ inventories to keep lid on oil price iea ‘enormous’ inventories to keep lid on oil price

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

iea ‘enormous’ inventories to keep lid on oil price iea ‘enormous’ inventories to keep lid on oil price

 



GMT 10:06 2012 Saturday ,28 July

Querrey advances at ATP LA Open

GMT 21:15 2017 Thursday ,01 June

Trump condemns deadly Kabul explosion

GMT 02:15 2017 Thursday ,24 August

Is your country on the Qatar free entry list of 80?

GMT 19:48 2016 Monday ,03 October

Controversial boxing champ Tyson Fury retires

GMT 08:20 2015 Tuesday ,08 December

PC market woes show no sign of easing

GMT 17:27 2017 Tuesday ,25 April

20 Yemeni soldiers killed, injured in explosion

GMT 11:52 2017 Saturday ,30 December

OIC condemns Mar Mina Church attack

GMT 00:03 2017 Saturday ,25 March

Arab Meeting to Examine Anti-Corruption Methods

GMT 13:12 2017 Thursday ,20 April

Deputy premier meets Arab League chief

GMT 14:13 2014 Friday ,10 January

Opel Astra GTC

GMT 18:27 2016 Tuesday ,02 August

Turkish Foreign Minister arrives in Islamabad

GMT 11:27 2016 Tuesday ,13 December

Saudi woman arrested for challenging social norms
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday