OPEC Says Crude Oil Market Likely To Balance By End Of 2018

OPEC Says Crude Oil Market Likely To Balance By End Of 2018

The stockpile glut - including crude as well as oil products - has decreased to 130 million barrels above the five-year average, Mohammad Barkindo, secretary general of the Organization of Petroleum Exporting Countries, said in a Bloomberg Television interview in Beijing on Wednesday.

The Paris-based IEA said USA crude output next year would climb by 870,000 barrels per day (bpd), up from its November forecast of 790,000 bpd.

Global oil demand for 2017 is expected to stand at 1.53m bbl/day, above initial forecasts, as a result of strong economic growth across most of the world.

On the heels of the above, as of 1513 GMT front month West Texas Intermediate crude oil futures were up by 0.24% to $57.28 a barrel but well off their intraday highs.

China's November crude runs reach 49.4 million metric tons, up 8.1% on year with January to November crude runs up 5.2% to 518.66 million metric tons even as domestic crude oil production fell 2.5% on year to 15.7 million metric tons with year-to-date output at 175.64 million metric tons, down 4.1%.

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"Our current outlook 2018 may not necessarily be a happy New Year for those who would like to see a tighter market", the IEA said in its monthly report published Thursday, adding that total supply growth could exceed demand growth.

Yesterday, OPEC had predicted in its own monthly market report that supply and demand were likely to balance out by the end of 2018 thanks to a pick-up in demand, notably from the transport sector.

Opec and 10 of its partners, including Russian Federation, agreed in November to extend a 1.8-million bpd supply cut throughout the whole of 2018 to force a drawdown in global inventories and support crude prices.

Analysts said, speculators widened their positions on the back of a firm trend in Asian trade as industry data showed a larger-than-expected draw down in the United States crude stockpile, which influenced crude futures here. Stocks fell by 5.1 million barrels in the week to December 8, the fourth consecutive week of decline, to 442.99 million barrels, the lowest since October 2015.

"Combined with continued efforts by OPEC and non-OPEC to support oil market stability, this should lead to a further reduction in excess global inventories, arriving at a balanced market by late 2018", the cartel said today.

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