Saudi oil min says no “free rides” for non-OPEC producers

Oil prices were little changed on Tuesday, trading in a tight range as rising USA shale output offset OPEC crude production cuts, with investors seeking clearer direction from upcoming inventory data and comments from senior oil officials.

“We are witnessing the start of a second wave of United States supply growth, and its size will depend on where prices go”, said IEA’s executive director Fatih Birol.

The report, Oil 2017, predicts three years of balance for the market but a drop in supply growth as companies’ spare production capacity falls to a 14-year low by 2022.

For the record, however, that is still above the output of 1.972 million barrels a day it’s supposed to target as a part of the OPEC-led production cut agreement that kicked in at the start of the year. Following a surprise growth in US production, analysts have lowered their forecasts for oil prices in this year.

A large potential supply deficit may take hold around 2020, “as demand growth is consistently forecast to outstrip projected increases in global oil supplies”, he said. “We want to increase our production”. At the same time, demand for European refined products is seen weakening. “The market is much better adapted to cope with that and so that’s a message we’ll be hearing out of a number of these CEOs that are going to be talking at CERAWeek”, Smith says. Now record U.S. crude stockpiles are raising doubts about that outlook. Iraq came up in fourth place with 5 million barrels. The recent low was set January 22, 2016, when Venezuela’s basket averaged just $21.63. “Of this, crude oil and condensates account for roughly 2.1 million b/d”.

Speaking to the reporters on the margins of the worldwide oil and gas meet CERA Week, Fatih Birol, Executive Director of IEA, said: “India is moving to the centre stage of global oil and energy markets”.

The production-reduction pact, which was joined by non-OPEC countries including Russian Federation and Kazakhstan, was meant to reduce global output by about 1.8 million bpd, and bring supplies closer to demand.

The report also highlights changes in worldwide oil-trade flows and investments in storage infrastructure.

The report also forecasted Canada and Brazil will export more crude to Asia than the Middle East does within the next few years.