The surplus on the oil market is over, but it is likely to reappear if Opec will stop its production. This is the diagnosis of the International Energy Agency (AIE), according to which the 2017 budget will show that demand averaged over 300,000 barrels a day, a difference which has resulted in a steady drop in stocks : For the first time since 2013 no quarter showed a buildup.
According to the Agency, next year, there is a substantial balance. But only as long as Opec continues to pull to the current levels (32.7 million barrels a day in September). In order not to jeopardize the results obtained, at the summit of November 30, the Organization will have to vote for a long extension of the production cuts, as suggested in recent days by Saudi Arabia and Russia.
“Looking at the whole of 2018,” says Aie, “oil demand and non Opec production will grow roughly to the same extent, and this is the current prospect that could limit the higher price ambitions.”
The opinion is only partly shared by Gary Ross, a well-known and well-respected analyst, founder of Pira Energy (now S & P Global Platts). The expert states that “the surplus that caused the fall in prices was largely absorbed,” but sees Brent pushing more than $ 60 / barrel perhaps by the end of the year and exceeding $ 70 in five years.
The AIE continues to expect strong growth in oil demand: +1.6 mbg this year (to 97.7 mbg), and +1.4 mbg next, when Opec production will not reach 1.5 mbg , twice this year, driven as usual by the US. The shale oil does not spring according to the agency, which expects 820,000 bg of US crude in 2018.
Of particular interest – obviously in the eyes of Opec – is the analysis of inventory performance, including the estimated (estimated) data of areas outside the Oceans. The Aie says that in the third quarter there has been an unusual fall for the season of 53 million barrels, between crude and refined products. Stocks have risen (moderately) only in China, they have declined in the rest of the world, especially in Europe and the US (especially diesel).
For so-called floating storage, the first to be disposed of when the market cycle reverses, there was even a 64 mb crash.
Net of China, global oil stocks this year dropped to 1.1 million barrels per day, Aie observes. As for China, accumulation (also linked to the creation of a strategic reserve) is slowing down: from June, Beijing’s imports are downhill.
From now on the US has come a further confirmation of the trend: the crude oil stores for the EIA also went down the previous week of 2.7 mb, the distillates of 1.5 mb (+2.5 mb the gasoline) . Since the beginning of the year – and despite the release of strategic stocks – US crude stocks dropped by about 17 mb, while in 2016 there was a 21-megabytes accumulated.