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Market news

12 July 2019

IEA: OPEC+ cuts do not change the fundamental outlook of an oversupplied market

Surging U.S. oil output will outpace sluggish global demand and lead to a large stocks build around the world in the next nine months, the International Energy Agency (IEA) said on Friday.

"Market tightness is not an issue for the time being and any rebalancing seems to have moved further into the future," the IEA said in its monthly report.

"Clearly, this presents a major challenge to those who have taken on the task of market management," it added, referring to the OPEC and producer allies such as Russia.

The demand for OPEC crude oil in early 2020 could fall to only 28 million bpd, it added, with non-OPEC expansion in 2020 rising by 2.1 million bpd -- a full 2 million bpd of which is expected to come from the United States. At current OPEC output levels of 30 million bpd, the IEA predicted that global oil stocks could rise by 136 million barrels by the end of the first quarter of 2020.

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