OPEC sees more oil supply from rivals, implying larger 2017 surplus

OIL: Crude prices fell Tuesday after the International Energy Agency said global demand for oil won’t grow as much as it originally expected, partly because of a more pronounced economic slowdown during the third quarter of the year.

The EIA noted that one of the Niger Delta Avengers (NDA’s) many demands are payouts, adding, oil output will continue to freeze until the Nigerian government and the NDA can reach an agreement. The 2017 world oil demand growth projection was relatively unchanged from OPEC’s previous report, with total global demand forecast at around 95.42 million bpd. “Although not the only militant group conducting attacks in the region, the NDA is now the most active”.

According to secondary sources, OPEC production ticked lower last month, as an increase from Iran and Saudi was offset by losses from Nigeria, and to a lesser extent, Libya. Energy companies are falling with the price of oil after the International Energy Agency said it expects slower growth in demand for oil this year.

“It is expected that there will be higher non-OPEC production in the second half of 2016 compared to the first half”, OPEC said in the report.

Opec raised its forecast of oil supplies from non-member countries next year as new fields come online and U.S. shale drillers prove more resilient than expected to cheap crude, pointing to a larger surplus in the market.

Oil is trading at $47 a barrel, half its level of mid-2014, as a supply glut that OPEC hoped cheap oil would banish sticks around. The revision is mostly due to Kashagan, OPEC said, as the long-delayed giant field finally starts up.

Near-record OPEC output, and higher supply from outside, could make it harder for OPEC and Russian Federation to come up with steps to support the market.

Representatives of producing nations held a flurry of meetings last week ahead of their gathering in Algiers, with Saudi Arabia’s influential Deputy Crown Prince Mohammed bin Salman meeting with Russia President Vladimir Putin on September 4, and OPEC’s Secretary-General Mohammed Barkindo speaking with Saudi and Algerian ministers on Friday.

“This, along with a potentially improving oil supply picture, would contribute to a reduction in the imbalance of market fundamentals”, it said.

Stockpiles in developed nations remained 341 million barrels above their five-year average in July, OPEC estimated.

Earlier this month, the closely-followed Reuters survey expected OPEC’s crude production toincrease by 40,000 bpd in August over July to a record-high in recent times, with Saudi Arabia likely setting a fresh output record.

And, yep, crude loadings from the triumvirate are up 12 percent from January’s volume, with Saudi exports above 7.5mn bpd last month, Iraq at 3.2mn bpd, and Iran at 2.6mn bpd.