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Thursday, June 21, 2018

Paris (AFP) – Global oil demand this year is being slightly boosted by recovery of European economies, and new production is building up fast in a rapidly changing oil market, the IEA said on Friday.

But instability in the Middle East and North Africa is keeping prices up, the Paris-based International Energy Agency said in its monthly review of the oil market.

The agency raised its forecast for demand for oil around the world this year by 90,000 barrels per day to 91.0 million barrels per day (mbd).

Demand for oil this year would rise by 1.1 percent or by 1.0 mbd from the level last year, and by 1.1 mbd in 2014 as the overall economic climate improves.

“Signs of improvement in the European economy support the upward revision,” the agency said.

New non-OPEC production is being driven by U.S. shale-energy output, and an agreement between Sudan and South Sudan opens up prospects of new oil coming on stream.

In addition, production has just begun at the huge Kashagan oil field, under the Caspian Sea off Kazakhstan.

Referring to the shale-energy revolution in North America, the agency said that the United States had produced 10 million barrels per day (mbd) of oil in the last two quarters “its highest in decades.”

The place taken by the United States “in the driver’s seat of growth is also a throwback to decades past” it said.

The United States is set to be the biggest producer outside the Organization of Petroleum Countries (OPEC) grouping by the second quarter of next year.

And this would make the United States a bigger producer than Russia, “and that’s not even counting biofuels and refinery gains,” the IEA forecast.

The IEA noted that just as OPEC production fell below 30.0 mbd for the first time for almost two years, non-OPEC production of oil and other liquids and gains in refining “surged by 1.7 mbd in the third quarter of this year from the equivalent figure last year.

This was “the steepest annual growth for any quarter in over 10-years,” the IEA said.