Oil Organization Predicts Rise in World Demand in 2018

Andrew Cummings
October 13, 2017

Global oil stockpiles will fall this year by 300,000 barrels a day as stronger demand and output curbs by OPEC and Russian Federation whittle away a surplus, the IEA said Thursday in its monthly report.

At the time of writing, WTI was trading at US$50.32 a barrel and Brent crude was at US$56.17 a barrel.

The difference stems partly from the disruptive effects of Hurricane Harvey on the USA refining system, which contributed to a build in crude oil inventories in Cushing, Okla., the physical delivery point for the WTI futures contract.

OPEC estimated that stockpiles in developed nations were still about 171 million barrels above that average in August, but expected trends in supply and demand will eliminate the surplus in about a year, the people said, asking not to be identified because the information isn't public.

Angola's production, based on direct communication, was 1.657 million barrels per day, a monthly drop of 23,000 barrels, with no data from Nigeria in this case.

However, the EIA also reported a 2.5-million-barrel rise in gasoline inventories for last week, exceeding analyst expectations of a 1.4-million-barrel increase, and in contrast to API estimates of a 1.575-million-barrel draw.

"Opec will not achieve normalised inventory levels before cuts expire at the end of March", Bernstein said, but "we believe an extension of cuts through 2018 should allow inventories to reach normalized levels before the end of 2018".

The report added that OPEC and key petroleum producers that do not belong to the organization keep successfully draining the market from an excess of barrels.

The step would not withdraw the USA from the deal but would give Congress 60 days to decide whether to impose new sanctions.

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