A recent report by the International Energy Agency (IEA) states that the global demand growth for oil would see a reduction from 1.8 million barrels per day (mb/d) in 2015 to 1.2 mb/d.
“Global demand growth is expected to slow from its five-year high of 1.8 mb/d in 2015 to 1.2 million barrels per day (mb/d) in 2016 – closer towards its long-term trend as previous price support is likely to wane,” the IEA Oil Market Report for October had reportedly told its subscribers.
Lower price support and a slowdown in the global economy would also lead to oversupplied conditions, the report said. This is despite a fall in U.S. shale oil production due to lower prices.
According to the report, the non-OPEC accounted for just under 40 percent of the 1.8 mb/d annual increase in total oil output.
“Lower oil prices and steep spending curbs are expected to cut non-OPEC output by nearly 0.5 mb/d in 2016,” the report said.
“OPEC crude supply rose by 90 0000 barrels per day (90 kb/d) in September to 31.72 mb/d as record Iraqi output more than offset a dip in Saudi supply, A slowdown in forecast demand growth and slightly higher non-OPEC supply lowers the 2016 “call” on OPEC by 0.2 mb/d from last month’s Oil Market Report to 31.1 mb/d.
Petroleum experts in Sri Lanka earlier predicted that oil prices would see minimum changes in the next two years.