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Oil output disruptions to erode surplus, demand may surprise - IEA

Published 2016-05-12, 04:00 a/m
© Reuters. Oil output disruptions to erode surplus, demand may surprise - IEA
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LONDON, May 12 (Reuters) - Unplanned disruption to oil
production in the likes of Canada, Nigeria or Libya could help
run down a global overhang of unused crude this year, while
demand will profit from growing gasoline consumption, the
International Energy Agency said on Thursday.
The IEA said output from non-OPEC producers is expected to
fall by 800,000 barrels per day (bpd) in 2016, an acceleration
from the agency's previous forecast for a drop-off of 710,000
bpd.
On the demand front, the Paris-based IEA left its forecast
for global demand growth broadly unchanged at 1.2 million bpd
for this year, but said the risks to future forecasts lay to the
upside.
"Any changes to our current 2016 global demand outlook are
now more likely to be upwards than downwards, as gasoline demand
grows strongly in nearly every key market, more than offsetting
weakness in middle distillates," the IEA said in its monthly Oil
Market Report.
"Slower demand growth in OECD (Organisation for Economic
Co-operation and Development) countries is not unexpected; it
represents a return to the norm," it added.
A wildfire in the Canadian province of Alberta has taken
more than 1 million bpd of capacity offline over the start of
May, but the IEA noted outages in Nigeria, Libya, Venezuela and
Kuwait, plus falling U.S. shale output, have also eaten into
global output.
The build in global inventories of crude oil is expected to
slow to just 200,000 bpd in the second half of this year, from
1.3 million bpd in the first half, the IEA said.
OPEC supply, led by increases in Iran, Iraq and the United
Arab Emirates, pushed the group's output up by 330,000 bpd in
April to a seven-year high of 32.76 million bpd, the agency
said.

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