IEA sees US leading global oil supply growth to 2024

Andrew Cummings
March 12, 2019

The so-called OPEC+ alliance, including Russian Federation and other producers, agreed in December to reduce supply by 1.2 million bpd from 1 January for six months, which will help to boost oil prices after last year's downward trend.

"We will see where the market is by June and adjust appropriately", Falih said after a meeting with Indian oil minister Dharmendra Pradhan in New Delhi. "But, barring this, I think we will just be kicking the can forward", Mr Falih said.

The United Arab Emirates in February exceeded its OPEC target for oil output cuts, achieving 119 percent of its goal, the country's energy minister said on Tuesday at an energy conference.

"We will continue to deliver on the OPEC & Non-OPEC commitment for voluntary production adjustments until the global market is re-balanced", Minister of Energy and Industry Suhail al-Mazrouei said on Twitter.

Sources recently said the most likely scenario is that the current supply cuts will be extended in June but much depends on the extent of United States sanctions on OPEC members Iran and Venezuela. For example, the discount of Mars US to Louisiana Light has narrowed to its smallest since 2011, according to Bloomberg data, while Western Canadian Select (WCS)-the benchmark price of oil from Canada's oil sands-was valued at $3.75 a barrel above WTI for delivery in April at Nederland, Texas, people familiar with the matter told Bloomberg.

High drilling activity past year resulted in a more than two million barrels per day rise in production, to 12.1 million bpd reached this February, making the United States the world's biggest producer of crude oil ahead of Russian Federation and Saudi Arabia. "But my expectation is that April is going to be pretty much like March".

The IEA's forecast came just a few weeks after the U.S. exported a record 3.6 million barrels of crude oil on a daily basis, with the country being also a major exporter of petroleum products including refined fuels.

However, the EIA cut its 2019 world oil demand growth forecast by 40,000 bpd to 1.45 million bpd. "In addition, global GDP growth has been soft and oil demand has yet to pick up seasonally", Bank of America Merrill Lynch said in a report on Monday.

"This shows Saudi Arabia's resolve to keep the oil market balanced by keeping oil supply tight", said Carsten Fritsch, analyst at Commerzbank. In 2017-2018, India's crude oil imports from Saudi Arabia were 36.8 million tonne, accounting for 16.7 per cent of total imports.

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