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The IEA expects another oversupply on the oil market next year



A worker on an oil drill near New Town, North Dakota.

Daniel Acker | Bloomberg | Getty Images

The International Energy Agency (IEA) is expecting the return of an oversupplied oil market next year, despite the recent introduction of an OPEC-led pact to curb any overload.

The Energy Agency said the "main message" "The closely watched report said that oil supply had exceeded demand by 0.9 million barrels per day in the first six months of 201

9.

" This surplus contributes to huge stockpiles in the second half of 2018, as oil production increased as demand slowed, "said the Paris-based IEA on Friday.

" It's clear that the tightness of the market is not an issue for the time being and that one

OPEC and its allies, led by Russia, have kept 1.2 million barrels a day out of the market since the beginning of the year.

The Energy Alliance, sometimes referred to as OPEC +, has moved into last week extended the pact until March 2020 to avoid price-effective inventory build-up

"The widely anticipated decision of OPEC + ministers to increase their P Extending the production agreement by March 2020 gives some guidance, but it does not change the fundamental prospects of a supply market, "said the IEA.

The international benchmark Brent crude index was around $ 67.00 (+ 0.7%) Friday morning, while the US West Texas Intermediate (WTI) gained 0.6% at $ 60.59.

Concerns that global demand is slowing led to Brent's 10% decline in June despite supportive geopolitical factors, the IEA said

OPEC v. USA

The Energy Agency expects the next Year with an expansion of non-OPEC oil supply of 2.1 million barrels a day, mainly due to rising US production. This would mean a slight increase of 2 million barrels per day in 2019 and reduce the need for OPEC crude oil.

The IEA said that an expected decline in demand for OPEC crude in the first three months of 2020 could lead to a decline in Group production of 28 million barrels per day – the lowest level since the third quarter of 2003. [19659002] In a separate monthly report from OPEC on Thursday, the 14-member group announced that global demand for crude oil will fall as competitors next year boosts production.

OPEC announced its first projections for 2020 in a monthly report, saying that by 2020 the world would need 29.27 million barrels of crude oil per day from its 14 members, a decrease of 1.34 million barrels per day opposite this year.

An expected drop in demand for OPEC crude underscores the continued push that the supply-reduction policy is making for US shales and other competitors. This may reinforce President Donald Trump's decision to impose sanctions on OPEC members Iran and Venezuela.

The US has surpassed Saudi Arabia and Russia to become the world's best producer this year JP Morgan's gas research warned Saudi Arabia and OPEC to regain some of their market share in the US.

Global demand growth is expected to accelerate from "exceptionally weak" 310,000 barrels per day in the first quarter from 2019 and 800,000 in the second quarter to reach 1.8 million barrels per day throughout the second half of the year the IEA.

For 2020, the energy agency said the pace of growth would average 1.4 million barrels a day compared to 1.2 million barrels a day this year.


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