Global oil demand growth for 2016 is now expected to be 1.5 million barrels per day (mb/d), according to the Oil Market Report of the International Energy Agency (IEA).
“In 2017, however, we still expect the rate of growth for global demand to fall back to 1.3 mb/d. The prospect of higher product prices - assuming that the cost of crude oil rises in 2017 - plus the possibility of a stronger US dollar are factors behind our reduced demand growth outlook for this year,” said IEA.
Early indications suggest a deeper reduction may be under way in OPEC crude production for January, as Saudi Arabia and its neighbors enforce supply cuts, according to the report.
“The IEA has anticipated for some time that shale oil production will increase in 2017, but we are now expecting an even larger increase of 170,000 b/d, following a decline of nearly 300,000 b/d last year,” said the organization.
Non-OPEC production is not all about the US, however, according to IEA.
“Elsewhere, long-planned projects are coming on stream in Brazil and Canada and their combined production will rise by 415,000 b/d this year,” said the report. “In China and Colombia, the sharp declines in production seen in 2016 will be reduced.”
The organization forecasts that for the non-OPEC countries as a whole, net production growth will be 380,000 b/d - after taking into account the output reduction commitments by eleven countries - and this increase could be supplemented by higher production from Libya and Nigeria, both of which are exempt from the production cuts.
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