IEA Expects Oil Market to Stabilize Again

22 April, 2016

IEA Expects Oil Market to Stabilize Again

International Energy Agency  claimed that the oil prices would be stable again in 2017 as the non-OPEC oil producers were expected to limit their production this year.

In the recent statement of Chief Faith Birol, he said that the oil market is expected to come back into balance from oversupply in 2017, provided there won’t be no major economic downturn.

Birol also explained that low oil prices had cut investment by about 40% in the past two years, with sharp falls in the United States, Canada, Latin America and Russia. The reliance of the world on the Middle East oil will accelerate substantially in the next few years, the executive director of IEA said.

“This year, we are expecting the biggest decline in non-OPEC oil supply in the last 25 years, almost 700,000 barrels per day. At the same time, global demand growth is in a hectic pace, led by India, China and other emerging countries,” Chief Faith Birol added.

Moreover, Nigeria is set to have a discussion with Saudi Arabia, Iran and other oil producers next month to once again extend the proposal of the OPEC to cap production on the next meeting in June.

Relatively, the Organization  of the Petroleum Exporting Countries failed to convince the major oil kingpins  to limit their output  after the Doha meeting last April 17. Saudi Arabia disagreed to cooperate since Iran, one of its major competitors, remained firmed on its decision not to participate in the said plan.

However, an analyst at BNP Paribas shared that any hope of market re-balancing from the current surplus in supply depends on the predicted decline in U.S. oil production.

“The US accounts for the bulk of non-Opec’s 2016 oil supply contraction of 700,000 barrels per day forecast. If the decline in the US oil supply proves insufficient to tighten balances, then ... the oil price will remain low,” the analyst explained further.

Earlier today, oil prices traded close to its one-year-high as the crude oil for  June delivery on the New York Mercantile Exchange climbed 0.11  percent to trade at $44.24 per barrel. Brent futures on the International Petroleum Exchange went up to $46.13 per barrel.

Also, based on the report of the Energy Information Administration, the U.S. crude inventories rose to 2.08 million barrels the previous week with a total crude stocks of 538.6 million barrels.

Amid the different views in the future condition of the oil market, a market expert pointed out that somehow optimism has returned to the energy market, at least for now.


Source link  
Gold Gains Ahead Of US Jobs Data

Market players kept their guards up as they await the US labor data report, a strong reading of which could urge the Federal Reserve to increase interest rates this month – a decision that would be bearish for non-interest bearing gold...

US Inflation Data Projected To Surge

The US economic growth has been sluggish in the first quarter, although not as strongly as initially expected, amid an increase in spending on home architecture and a constant increase in inventory investment by business...

Goldman Sachs: Market Flips into Deficit, Oil Surges

Oil prices increased more than 1 percent on Monday after Goldman Sachs stated that the market has ended for nearly two years of oversupply subsequent to a global oil disruptions and a market deficit...


AUD, NZD Edge Higher but Gains Still Limited

The Australian and New Zealand dollars rallied against the greenback on Wednesday, but gains were anticipated to stay capped by lower prices of crude oil...

World Stock Markets Soar

World stock markets rallied on Tuesday, fueled by a strong corporate earnings in Europe, including improvements on Greek debt talks and Japan’s new pledge in preparation to a weaker currency...

Gold Rallies as USD Plunges to 16-month Lows

Gold prices ticked higher as the greenback slid to 16-month lows during the session earlier. On the Comex division of the New York Mercantile Exchange, gold delivery for June rallied at $1,303.85 per troy ounce, advancing $6.55 or 0.51 percent...


Asian Shares Tumble, Nikkei Falls Against Yen

Analysts forecast that Germany DAX would hit 0.06 percent higher when the market opens, while France’s CAC 40 was anticipated to remain steady. Meanwhile, UK markets are closed due to a public holiday.

US Stocks Down after BOJ Hold Interest Rate

Shares in the U.S. plummeted following the decline of the stocks in the Asian market as the Bank of Japan left the interest rate unchanged...

U.S. futures Slides Ahead of Data Flow

Wall Street futures dropped on Friday after the Dow issued its first decline of more than 1% in two months, while investors are closely watching on data...

  


Share: