Next year, the oil market will not necessarily be Happy New Year for those who would like to see it more scarce, the IEA writes in its monthly review.
In 2017, oil supplies increased by 200 thousand b / s, in November – to 97.8 million b / s, to the highest level in the year due to the growth in production in the United States.
In 2018, “the overall growth in supply could exceed demand growth.” “In reality, in the first half of the year there may be an excess of 200 thousand b / s before the transition to a deficit of 200 thousand b / s in the second half,” the agency notes, noting that at the end of the year the market can be balanced.
The reason for the IEA is the increase in oil production in the US, where drilling activity increased again, which may indicate higher production in the coming months. Therefore, the IEA increased the forecast for growth in US oil production by 390,000 b / d in 2017 and by 870 thousand b / s in 2018. Higher production in the United States accounts for about 75% of the total growth in oil supplies from non-OPEC countries in 2017 and 2018.
Deliveries are expected to grow by 630 thousand b / s in 2017 and another 1.6 million b / s in 2018 – to 59.6 million b / s. Other sources of growth will be Brazil, Canada, Great Britain and Kazakhstan.
“Much can change in the next few months, but it looks like the fall in reserves in 2018 at the same rate of 500 thousand b / s, which we saw in 2017, may not take place,” experts say.