economy Since 2017-08-12 at 15:14 (Baghdad time)
Mawazine News - Follow up
The International Energy Agency (IEA) has revised its forecast for faster oil demand growth this year, reducing supply oversupply despite rising crude production in North America and weak OPEC commitment to production cuts.
According to its forecasts, demand for oil will grow in 2017 to 1.5 million barrels per day compared with 1.4 million barrels per day in its previous monthly report, and said it expects demand to grow by an additional 1.4 million barrels per day next year. According to Reuters.
"Producers have to be encouraged by demand, which is growing on an annualized basis at a stronger pace than originally expected," the Paris-based energy agency said.
"Confidence will be strengthened that the restoration of balance will continue if some producers participating in production agreements do not show signs of weakness as they strengthen their positions," said the agency, which advises industrialized countries on energy policy.
OPEC's commitment to cuts fell to 75 percent last July, the lowest level since production cuts began in January, it said.
The agency noted the weak commitment of Algeria, Iraq and the United Arab Emirates to production cuts. In addition, Libya, the OPEC member state currently exempted from cuts, has recorded a sharp increase in production.
As a result, the global oil supply rose by 520,000 bpd in July to 500 thousand bpd from a year earlier.
Adding to the challenges faced by oil producers to support crude prices is non-OPEC production growth. Independent production is expected to rise by 0.7 million barrels per day in 2017 and 1.4 million bpd in 2018 due to strong US production increases that do not participate in the cuts.
But the strength of global demand growth is helping to get rid of surplus crude, and the International Energy Agency (IEA) has revealed a decline in stocks in industrialized nations in June and July.
Stocks remain high at 219 million barrels above the five-year average, OPEC's target of cutting output. Ending 29/34 R.