Global oil demand to exceed expectations in 2017, says International Energy Agency
OPEC output falls in August for the first time in five months while Hurricane Harvey hampers production in August and September
By Karen Gilchrist
Global oil demand is set to accelerate faster than anticipated this year, according to the International Energy Agency (IEA), which has revised up its 2017 growth estimates.
Strong second-quarter demand has buoyed oil markets, which have been struggling to rebalance as a supply glut has weighed heavily on prices, the IEA said in its September report released Wednesday.
Demand grew by 2.3 million barrels per day (mb/d), or 2.4 per cent, in the second quarter of 2017, prompting the Paris-based organisation to increase its growth estimate for the year to 1.6 mb/d, or 1.7 per cent. For 2018, the IEA is predicting growth of 1.4 mb/d, or 1.4 per cent.
The revision marks an uptick from its August forecasts as the IEA grows more confident that shifting fundamentals are enabling demand to catch up with supply. In August, the IEA has anticipated annual growth would hit 1.5 mb/d, again an increase on July’s 1.4 mb/d forecast.
It comes as global oil supplies fell in August due to both multilateral measures aimed at stemming excess stock and unplanned outages.
OPEC output fell in August for the first time in five months, after turmoil in Libya disrupted flows and other member countries reduced production. Compliance levels in August hit 82 per cent compared with 75 per cent.
The data will buoy signatories who implemented the deal in January in a bid to boost oil prices but have since struggled to cap supply amid increased output from member states Libya and Nigeria. The organisation is currently discussing an extension to the deal.
Supply is also said to have been hampered by Hurricane Harvey in the U.S., which caused refineries to shut. The storm is estimated to have shut in roughly 200,000 barrels per day of production in August, with a further 300,000 barrels per day expected to be lost in September.
Overall, global supply fell by 720,000 barrels per day in August.