Oil market still unbalanced despite OPEC+ cuts: IEA

Additional cuts by the powerful OPEC group of oil producers and its allies may not be enough to eliminate a glut of crude on the global market, the IEA warned yesterday.

Meanwhile, energy consumption by China is bounding higher -- a signal that the country's economy may be in better shape than widely thought as its trade war with the United States rumbles on.

Last Friday, OPEC and its allies reached a deal to cut production by 500,000 barrels per day in a bid to support prices which have been under pressure from abundant reserves and weak global economic growth.

While Saudi Arabia, OPEC's largest producer, agreed a further voluntary reduction of 400,000 barrels per day, the International Energy Agency said that most of that cut had already been implemented already.

In its latest monthly report, the IEA estimated that the net impact of the pledges would be a reduction of 530,000 barrels per day from November levels.

"Even if they adhere strictly to the cut, there is still likely to be a strong build in inventories during the first half of next year," said the Paris-based organisation, which advises oil consuming nations.

Despite cutting its forecast for growth in oil production outside of the OPEC oil cartel, the IEA said "there could still be a surplus of 0.7" million barrels per day (mbd) in the global market in the first quarter of next year.

 

Oil market still unbalanced despite OPEC+ cuts: IEA

Additional cuts by the powerful OPEC group of oil producers and its allies may not be enough to eliminate a glut of crude on the global market, the IEA warned yesterday. Meanwhile, energy consumption by China is bounding higher -- a signal that the countrys economy may be in better shape than widely thought as its trade war with the United States rumbles on. Last Friday, OPEC and its allies reached a deal to cut production by 500,000 barrels per day in a bid to support prices which have been under pressure from abundant reserves and weak global economic growth. While Saudi Arabia, OPECs largest producer, agreed a further voluntary reduction of 400,000 barrels per day, the International Energy Agency said that most of that cut had already been implemented already. In its latest monthly report, the IEA estimated that the net impact of the pledges would be a reduction of 530,000 barrels per day from November levels. Even if they adhere strictly to the cut, there is still likely to be a strong build in inventories during the first half of next year, said the Paris-based organisation, which advises oil consuming nations. Despite cutting its forecast for growth in oil production outside of the OPEC oil cartel, the IEA said there could still be a surplus of 0.7 million barrels per day (mbd) in the global market in the first quarter of next year.