IEA says strong oil demand growth helps market's rebalancing

8/11/2017 11:14:08 AM

An oil well pump jack is seen at an oil field supply yard near Denver, Colorado February 2, 2015

An oil well pump jack is seen at an oil field supply yard near Denver, Colorado February 2, 2015

LONDON, Reuters, August 11, 2017  - Global oil demand will grow more quickly than expected this year, helping to ease a glut despite rising crude production from North America and weak OPEC compliance with output cuts, the International Energy Agency said on Friday.

The agency revised its 2017 demand growth forecast to 1.5 million barrels per day (bpd) versus 1.4 million bpd in its previous monthly report and said it expected demand to expand by a further 1.4 million bpd next year.

'Producers should find encouragement from demand, which is growing year-on-year more strongly than first thought,' the Paris-based IEA said.

'There would be more confidence that rebalancing is here to stay if some producers party to the output agreements were not, just as they are gaining the upper hand, showing signs of weakening their resolve,' the IEA added.

The Organization of the Petroleum Exporting Countries is curbing output by about 1.2 million bpd, while Russia and other non-OPEC producers cut half as much, until March 20 18.

The IEA said OPEC's compliance with the cuts had fallen to 75 percent in July, the lowest this year.

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