OPEC sees more balanced oil market in 2016 | Economy

Here’s how Accendo Markets wrapped the close in a note to clients on this morning: “US Markets closed positive, echoing gains in Europe, with relief on a Greece deal, a few welcome progress with Iran’s nuclear agreement (watch oil) and despite attention reverting to the timeline on a United States rate rise”.

He said Iran can restore its production of one million barrels per day fairly quickly, which supply can hit the market in less than six months.

“The current timing would be at the end of the year, which is the time given to global Atomic Energy Agency to verify that Iran is taking steps to constrain (its) nuclear programme”, Ang said in a market commentary. As said by industry data, that would be a record high.

What the futures curves are most likely showing is that they have priced in the return of Iranian oil from next year, but are treading a middle path between the optimistic and pessimistic scenarios.

The Organisation of the Petroleum Exporting Countries (OPEC) has predicted that the oil market should be more balanced next year as China and the developing world use more oil.

“There is still, frankly, a lot of uncertainty about exactly what it will do in terms of oil supply”.

Oil Minister Bijan Zanganeh said last month that Iran was aiming to add 500,000 barrels per day (bpd) to production within two months of easing Western sanctions that have halved shipments in recent years, and as much as 1 million bpd in six to seven months. “The more the Chinese buy, the faster the global crude glut will clear”.

“World oil demand growth should outpace any increase in oil supply from non-OPEC sources and ultra-light oils such as condensate, increasing consumption of OPEC crude”, it said in the report.

Supply of oil from non-OPEC producers was expected to grow by only 300,000 bpd in 2016, down sharply from growth of 860,000 bpd this year.

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Announcements were made when China’s stock market lost 1/3 of its overall value since June and also showed signs of a possible seize up last Wednesday.

He agrees with a growing body of market watchers that Iran’s ability to raise its oil exports will be limited and slow. Ms Sen’s colleague at Energy Aspects, Richard Mallinson, just completed a detailed field-by-field study of Iran’s oilfields, which have been held back not only by sanctions but by years of under-investment.