IEA: OPEC Turning Up The Taps in 2016 Despite Demand Reduction

by Ship & Bunker News Team
Thursday February 11, 2016

The International Energy Agency (IEA) in its latest Oil Market Report for February says global oil demand is forecast "to ease back considerably" this year to 1.2 million barrels per day (bpd) compared to the five year high of 1.6 million bpd last year.

However, IEA notes that in January the crude oil output from the Organization of the Petroleum Exporting Countries (OPEC) rose by 280 000 bpd to 32.63 million bpd "as Saudi Arabia, Iraq, and a sanctions-free Iran all turned up the taps.

"Supplies from the group during January stood nearly 1.7 million bpd higher year-on-year."

Furthermore, non-OPEC output is expected to decline in 2016 by only 0.6 million bpd, to 57.1 million bpd.

Despite seasonal maintenance in the U.S. and weakened refinery margins contributing to global refinery runs falling in January by 1.3 million bpd to 79.8 million bpd, global throughputs were 1.7 million bpd above that of the same time last year, "with gains particularly strong in the United States and the Middle East," according to the agency.

IEA said in a statement of its 2016 predictions, "If these numbers prove to be accurate, and with the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term."

IEA's December prediction of world oil demand at 1.2 million bpd means that bunker prices, which in 2015 slumped to their lowest in over 11 years in some of the primary ports, are set to remain under pressure this year.

Ship & Bunker News Team
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