36922
IEA Predicts Global Oil Glut to Persist Into 2017
Energy

IEA Predicts Global Oil Glut to Persist Into 2017

The global oil glut will persist in 2017, limiting any chance of a price rebound in the short run as the surplus takes even longer to clear than previously estimated, according to the International Energy Agency.

“Only in 2017 will we finally see oil supply and demand aligned but the enormous stocks being accumulated will act as a dampener on the pace of recovery in oil prices,” the Paris-based adviser to 29 countries said in its medium-term report on Monday, Bloomberg reported. “It is hard to see oil prices recovering significantly in the short term from the low levels prevailing” currently, it said.

IEA also predicted that US shale oil production will retreat this year and next as the price slump hits drilling, but its subsequent recovery will ensure America remains the biggest source of new supply to 2021. It said while US light, tight oil output is "falling steeply for now" amid a low price environment, the market will begin rebalancing in 2017 and, soon after that, the US oil industry could see a robust increase in oil production.

By 2021, the IEA said, "the US and Iran are seen leading production gains among non-OPEC and OPEC countries respectively". The Organization of Petroleum Exporting Countries will expand its market share slightly this decade, with Iran, newly released from international sanctions, displacing Iraq as the organization’s biggest contributor to supply growth, the agency said.

The IEA’s new outlook is the latest sign that oil forecasters are bracing for a “lower-for-longer” price environment.

The agency acknowledged that the industry’s expectations and its own predictions that oil markets would recover in 2015 proved “very wide off the mark”.

The report also signals that while OPEC will succeed in its policy of defending market share, the group will have to endure a prolonged period of reduced revenues.

Oil prices plunged from a high of around $115 a barrel in June 2014 and are currently at around $33 for benchmark Brent crude and $30 for US West Texas Intermediate.

An imbalance in supply and demand, brimming crude stockpiles and record output from OPEC producers–the 13-member group that chose not to cut production to maintain market share and pressure rivals–has been partly blamed for the decline in prices. Non-OPEC producers, such as those in the US, have struggled to break even with the lower oil price and have cut costs drastically, lowering US oil output.

Short URL : http://goo.gl/29XHfm
  1. http://goo.gl/ImZk7X
  • http://goo.gl/QZJEqc
  • http://goo.gl/gn83u9
  • http://goo.gl/9YDEdc
  • http://goo.gl/qfCJ2l

You can also read ...

India Co. Says ‘Important’ to  Buy Some Iranian Oil
Mangalore Refinery and Petrochemicals, a subsidiary of India’s...
NIOC Chief: US Talk to Zero Iran Oil Export Is Hot Air
Rhetoric from the United States that it wants to reduce Iran’s...
Iran's Marjan Petrochem Company Exports 1st Methanol Cargo
The first 20,000 ton methanol consignment produced by Marjan...
Crude Prices Rise
Oil prices rose for a fourth day on Wednesday after industry...
NOPEC Threat Prompts Change at OPEC
OPEC has urged its members not to mention oil prices when...
Russian Expert: Collaboration With Oil Majors Could  Help Iran Enhance Energy Output
Iran has proved that it has great potential for investment...
Foreign Firms to Invest in Mazandaran DGs Power Projects
Foreign companies have signed contracts to invest in small...

Trending

Googleplus