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Page added on January 16, 2015
IEA Sees Oil-Price Recovery; Cuts 2015 Non-OPEC Output Estimate
Non-OPEC oil producers will increase output this year at a slower rate than previously forecast, aiding a recovery in crude prices, the International Energy Agency said.
The adviser lowered its non-OPEC supply growth estimate by 350,000 barrels a day, the first cut since the 2015 forecast was introduced in July. Half the cut is from Colombian output while effects on U.S. production are so far “marginal,” it said. The slow-down in non-OPEC output will lead to a “rebalancing” of currently over-supplied global markets in the second half, reviving prices, the agency said.
“Companies have been taking an axe to their budgets, postponing or cancelling new projects,” the Paris-based IEA, which advises 29 nations on energy policy, said in its monthly market report. “A price recovery, barring any major disruption, may not be imminent, but signs are mounting that the tide will turn.”
Oil prices have collapsed almost 60 percent from last year’s peak, as the Organization of Petroleum Exporting Countries resolved to defend market share against the fastest U.S. production in more than three decades. OPEC’s decision is testing the ability of rival producers to keep pumping as prices slump to a 5 1/2-year low. Brent futures traded near $49 a barrel today.
Colombia Reduced
Non-OPEC supply still will increase 950,000 barrels a day this year to 57.5 million a day, the IEA said. Colombia’s supply will be about 175,000 lower than previously anticipated, about the same as Canada and the U.S. combined.
Any stimulus for demand from lower prices remains “elusive” because of underlying weakness in the global economy, said the agency, which kept its global oil consumption forecast for 2015 unchanged. The surplus in oil inventories in developed economies in December was the highest for the time of year since 2010, its preliminary data show.
A higher level of supply from OPEC will be required than previously expected because of slower non-OPEC growth, according to the report. The organization will need to provide 29.2 million barrels a day this year, about 300,000 a day more than last month’s forecast. That’s still about 1.3 million a day less than its 12 members pumped in December, when Iraqi supplies rose to a 35-year high of 3.7 million barrels a day.
Production from Saudi Arabia, OPEC’s biggest member, remained steady in December at 9.6 million barrels a day, the IEA said.
OPEC itself reduced estimates for the crude it will need to provide in 2015 by 100,000 barrels a day to 28.8 million a day in its monthly market report yesterday.
54 Comments on "IEA Sees Oil-Price Recovery; Cuts 2015 Non-OPEC Output Estimate"
Davy on Sat, 17th Jan 2015 7:24 am
Greg, Planter knows our opinion of the pseudo science economics in regards to the so called oil “glut”. He likes pushing our button.
My position is a paradigm shift has hit with the bumpy plateau slipping into a bumpy descent. Demand and supply will spiral down in a vicious cycle of destruction. This condition, like the economy, is not yet fully apparent. The stronger effects I forecast to hit later 2015 into 2016.
Makati1 on Sat, 17th Jan 2015 7:39 am
Davy, I am not siding with anyone, just stating facts. The “War on terror” is a sales gimmick for the US MIC and nothing more. The “War on Drugs” didn’t use enough weapons to generate high profits. The “War on Poverty” Ditto. Without wars of some kind, the Empire is dead. Now they are getting the old Cold War restarted so they can sell weapons before they go under.
But it’s days are also numbered as the internet is pulling down the propaganda curtain and it is getting harder to keep the sheeple in line or the world fooled. Even the Obaminator’s lies are getting laughed at behind his back. They know what is coming. Hence the militarization of the police and the growing Police State and loss of freedom.
All facts, not hate.
Davy on Sat, 17th Jan 2015 8:05 am
Mak, I accept these issues with the US although not the exaggerated Mak version. Your methods play well with the others here who routinely indulge in propagandist tendencies then claim they are speaking facts. Anyone saying they are speaking the facts are suspect in my book. Their facts are selective facts supporting a message. I will add that you are fighting propaganda with propaganda which negates your message. Russia, China and other pseudo dictatorships are no better in their own way. The degree of filth is less than the US but not much.
Speculawyer on Sat, 17th Jan 2015 3:42 pm
People often like to quote the phrase “The cure for high oil prices is high oil prices.”
The corollary is also true . . . “The cure for low oil prices is low oil prices.”
(Low oil prices means companies invest less in drilling and consumers decide to consume more . . . and price bounces back eventually.)