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.Publication source