Forget Doha, says the International Energy Agency (IEA), bet it all on US production crashing.
First, IEA says Doha Don’t Matter…
A deal to freeze oil production by OPEC and non-OPEC producers will have a limited impact on global supply and markets are unlikely to rebalance before 2017, the International Energy Agency (IEA) said on Thursday.
The IEA, which oversees the energy policies of industrialized nations, said even though the decline in U.S. output was gathering pace and Iran was not adding as many barrels as expected, the world would still produce more oil than it consumes throughout 2016.
Then, as Bloomberg reports, IEA says global oil markets will “move close to balance” in the second half of the year as lower prices take their toll on production outside OPEC…
The world surplus will diminish to 200,000 barrels a day in the last six months of the year from 1.5 million in the first half, the agency said in a report on Thursday. Production outside the Organization of Petroleum Exporting Countries will decline by the most since 1992 as the U.S. shale oil boom falters. The glut is also being tempered as Iran restores exports only gradually with financial barriers to sales persisting even after the lifting of international sanctions.
“There is no doubt as to the direction of travel for the supply-demand balance,” the Paris-based adviser to industrialized nations said. “There are signs that the much-anticipated slide in production of light, tight oil in the U.S. is gathering pace.”
And the algos love it…
So what happens when the rallying oil price enables these zombie glut creators to stay alive longer and re-create the glut in H2?
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