Oil prices rose in today’s trading due to forecasts of the International Energy Agency (IEA) for the restoration of the black gold market in the next few months, after several years of over-production.
The IEA, which advises major developed economies on energy policy, forecast that oil production will decrease in the third quarter for the first time in more than two years.
The oil market will begin to recover in the second half of 2016, but the process will be slow and painful amid weakening global demand and increased supply from countries outside OPEC, the International Energy Agency said on Thursday.
In its monthly report, the IEA said that is waiting for a significant reduction of world oil reserves in the next few months, which should reduce the excess on the market, continuing from 2014 amid rising supply from OPEC and non-OPEC countries.
“The fall of oil has returned …” glut “in the headlines”. The organization claims that, according to its data, in the second quarter surplus on the market will almost vanish, and in the third quarter is expected to significantly decline.
“Reduction of stocks of petroleum products will increase the refinery’s appetite for oil and help to create a basis for a sustainable recovery of oil balance.”
However, this process will be slow, because the stocks in developed countries reached a record 3,093 billion barrels.
The growth in global demand is expected to slow down from 1.4 million barrels per day in 2016 to 1.2 million barrels per day in 2017.
According to the IEA, in 2017 mining producers, not OPEC, will rise by 0.3 million barrels per day, compared with a rise of 0.2 million in the previous forecast.
Due to the slowdown in demand and an increase in production countries outside OPEC, the IEA lowered its forecast for OPEC crude oil production in 2017 by 0.2 million barrels per day to 33.5 million barrels per day.
This figure is close to the level of 33.39 million barrels per day in July, when production in Saudi Arabia, Kuwait and the UAE has reached record levels, pushing total shipments from OPEC to eight-year highs.
The greatest growth this year is observed in Iran and Iraq, where oil production increased by 560,000 and 500,000 barrels per day, respectively, the IEA said.
Oil prices fell sharply on Wednesday after the release of the Energy Information Administration data, according to which the US oil reserves rose for the week ending August 5 at 1.06 million barrels to 523.6 million barrels. Analysts had expected crude oil inventories to fell by 1.03 million barrels.
The cost of the September futures on US light crude oil WTI (Light Sweet Crude Oil) rose to 43.06 dollars per barrel.
September futures price for North Sea petroleum mix of Brent crude rose to 45.61 dollars a barrel on the London Stock Exchange ICE Futures Europe.
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