Indian crude basket closes ted lower on Monday

Supplies outpaced consumption by 800,000 barrels a day in the first half of this year, the agency said, having estimated that difference at 1.3 million a day in last month’s report. This represents a 46% decline from the $753 billion earned in 2014, mainly as a result of a precipitous fall in average annual crude oil prices during the year, and to a lesser extent to decreases in the level of OPEC net oil exports.

The price of USA light sweet crude was steady around $48.70, up about 0.4 percent in late morning trade.

Although global oil markets are now rebalancing thanks to unplanned supply outages worldwide and robust demand growth, the International Energy Agency (IEA) said in its first 2017 outlook that markets could become oversupplied again, with the return of large-volume shut-in production and slower-than-expected demand.

The agency now expects to OPEC production to average 32.4 million barrels per day in 2016, a 800,000 bpd year-over-year increase.

Futures fell as much as 0.8 percent in NY after settling at the lowest since June 3 on Monday as investors looked ahead to a June 23 referendum that will determine Britain’s membership in the EU.

In New York, US benchmark West Texas Intermediate for July delivery shed 39 cents to US$48.49 a barrel.

Furthermore, Piper Jaffray questions the non-OPEC supply growth projected by the IEA for 2017. Total output was 95.4 million barrels per day, 590,000 barrels per day less than a year ago and the first real drop since early 2013.

However, the watchdog expects the market to return to a surplus in the first half of 2017 with a flat growth during the whole year.

In its first oil-consumption assessment of next year, the IEA sees global oil demand growing steadily by 1.3 million barrels a day. “The second main factor to transform the outlook has been unexpected supply cuts”. Opec’s reference price for May averaged US$43.21 a barrel, a gain of $5.35 compared to the previous month.

The IEA stated that while USA shale production will begin to recover in mid-2017 and production outside OPEC will grow by a modest 200,000 bpd, global inventories will decline by 100,000 bpd through the year.