World Bulletin / News Desk
Supply and demand in the oil market are close to matching up, the IEA said Thursday, as landmark OPEC-led production cuts are mitigated by rising US supply and slipping worldwide demand growth.
But oil at above $50 a barrel has, in turn, attracted higher-cost producers in the United States back to the market, and frantic American drilling will push non-OPEC supply to surprisingly high levels throughout the year, the IEA predicted.
"Although the oil market will likely tighten throughout the year, overall non-OPEC production, not just in the US, will soon be on the rise again," it said in the report.
At the end of November, the Organization of Petroleum Exporting Countries (OPEC) agreed to cut output by 1.2 million barrels per day (mb/d) from January 1, initially for a period of six months.
Then in December, non-OPEC producers led by Russia agreed to cut their own output to 558,000 barrels per day.
The aim was to reduce a glut in global oil supply that had depressed prices.
Reports this week said that OPEC kingpin Saudi Arabia is pushing the cartel's producers to extend the agreement by another six months at their meeting in May.
The IEA made no prediction about such a likelihood, but said that a consequence of OPEC "hypothetically" renewing the deal would be to support prices more, and give further encouragement to US shale oil producers.
This means that non-OPEC oil production will soon be on the rise again.
"Even after taking into account production cut pledges from the eleven non-OPEC countries, unplanned outages in Canada as well as in the North Sea, we expect (non-OPEC) production will grow again on a year-on-year basis by May," the report said.
Meanwhile on the demand side, the IEA revised down its estimates for the worldwide thirst for oil, meaning there will be more oil available than previously thought.
"New data shows weaker-than-expected growth in a number of countries including Russia, India, several Middle Eastern countries, Korea and the US, where demand has stalled in recent months," it said.
Demand growth for 2017 is now expected to be 1.3 million barrels per day, down from the IEA's previous forecast of 1.4 million.
Borsa Istanbul releases integrated annual report for first time
Turkey has served as main route for refugees trying to cross into Europe
Turkish Central Bank fixes foreign exchange rates for rediscount credits repayments
Indices for service, retail trade, construction sectors fall in current month compared with April: Official data
Thanks to advances in shale gas production, notably in the northeast, America has been the world's largest natural gas producer since 2009 and extracted two billion cubic meters per day in 2017.
BIST 100 climbs 0.64 pct while USD/TRY exchange rate stands at 4.7805
Ankara vows to reach 2018 budget targets, says finance minister
American Commerce Secretary Wilbur Ross announced Wednesday he had initiated a so-called Section 232 investigation on auto trade after speaking with President Donald Trump on the matter.
BIST 100 climbs more than 1,100 points; foreign currency exchange rates drop against lira
BIST 100 index goes down 1.39 percent at close; Turkish lira continues to decline against other currencies
Salt Lake storage facility aims to have capacity of 5.4 billion cubic meters by 2023
BIST 100 falls 0.50 percent; US dollar/Turkish lira exchange rate stands at 4.7560
Treasury reports central government debt stock in April rises 15.8 pct year-on-year, reaching $226.8 billion
Trade Commissioner Cecilia Malmstrom spoke ahead of talks of the EU's 28 trade ministers to discuss an attempt to woo the US away from punishing steel and aluminium tariffs and win Europe a similar break as handed China.
BIST 100 rises 0.45 percent; US dollar/Turkish lira exchange rate stands at 4.5760