The market wasn’t caught by surprise by the IEA data, as on Tuesday, the American Petroleum Institute reported that US crude inventories rose 2.8 million barrels last week, while gasoline supplies increased by 1.8 million barrels.
The IEA said on Wednesday it expected growth in non-OPEC supply to be higher next year than growth in overall global demand.
“OPEC 2017 year-to-date exports are only down by 0.3 million barrels per day (bpd) from the October 2016 baseline”, analysts at AB Bernstein said in a note.
NIGERIA’s Brent crude price may increase by between $2 and $3 per barrel in the coming weeks, on the back of stable demand and low volatilities, a report by the global oil research firm S&P Global Platts, has predicted.
The continuous rise in the USA production further negated the impact of restriction in oil production. Its July schedule is at 1.84 million bpd, slightly higher than the revised June programme that added Forcados.
However, prices are still down by almost 13 percent since May 25, when the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other oil producers agreed to extend production cuts.
Oil prices gave up gains on Tuesday after the release of the report to trade towards $48 a barrel, below the $60 level that top OPEC producer Saudi Arabia would like to see and less than half the level of mid-2014.
This was “due to changes in fundamentals, especially the shift in U.S. supply from a forecast contraction to positive growth”, the report said.
The country already agreed to keep its oil output to 300,000 barrels a day below October’s level, but the IEA expects Russian producers to proceed with increase spending in oil projects. Most analysts surveyed by Bloomberg had forecast a decline. More specifically for oil, there are signs of a slowdown in China, long the key driver in fuel demand growth, as its economy slows down and refiners have produced far too much fuel for the market to consume, forcing a slowdown in activity.
Crude edged higher on Friday, but prices remain near November lows, as rising United States output is countering production cuts agreed to by OPEC members.
Crude oil prices continue to get pressured as figures of oil and gasoline stockpiles continues to inflate last week.
The country’s oil production stood at 3.796 million bpd in the first quarter of 2017, rising from 3.741 million bpd in its previous quarter, according to the OPEC’s report.