International Energy Agency: Excess supply in the oil market will continue despite the OPEC + agreement
Economy News _ Baghdad
The International Energy Agency said that global oil stocks may rise sharply despite an agreement between OPEC and its allies to increase production cuts and also less than expected production for the United States and other non-OPEC countries.
The Paris-based agency added in a monthly report, "Despite the additional cuts ... and reducing our expectations for the growth of supplies of non-OPEC countries in 2020 to 2.1 million barrels per day, global oil stocks may increase by 700 thousand barrels in the first quarter of 2020".
The Organization of the Petroleum Exporting Countries and other producers, including Russia, agreed last week to curb an additional 500,000 bpd of production in the first quarter of 2020 in order to balance the market and support prices, but without pledging binding action beyond March.
Even if OPEC + adheres strictly to the new deal and production of member states with political problems, such as Iran, Libya and Venezuela, remains stable, only 530,000 bpd of crude will be withdrawn from the market compared to November production, the agency said.
The International Energy Agency revised its forecast for growth in supplies of non-OPEC countries in 2020 by a cut of 200,000 barrels per day "due to a continuing slowdown in the United States, reduced expectations for Brazil and Ghana and also additional cuts from (OPEC allies)".