The International Energy Agency (IEA) has published its latest monthly Oil Market Report. Oil demand in the first quarter of the year was supported by cold weather in the northern hemisphere and reached a growth rate of around 2mn barrels per day (bpd).
But the second quarter has seen a slowdown, partly spurred by higher prices and has retreated to 900,000 bpd. The average demand over H1 will settle at 1.5mn bpd and will slip further to 1.3mn bpd in the second half of the year.
But output is set to increase. Last month, global supply rose by 370,000 bpd due to increased production from leading pumpers Saudi Arabia and Russia following the decision agreed in Vienna by Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC members to scale back their stringent cutbacks to 100% compliance. The IEA stated that OPEC crude production in June reached a four-month high of 31.9mn bpd, with a surge from Saudi Arabia offsetting losses in Angola, Libya, and Venezuela.
Meanwhile, non-OPEC output is likely to spike by 2mn bpd on average this year and dip slightly to 1.8mn bpd in 2019, led by the surging shale production in the US. However, “temporary disruptions in Canada, Brazil, Kazakhstan and the North Sea” will affect present levels.
