Global oil supply rose significantly in May to reach 98.7 million barrels per day (mbpd), a sharp 2.2 mbpd above global production at the same time in 2017, the International Energy Agency (IEA) said on Wednesday.
But OPEC supply, which is part of a voluntary restraint agreement from November last year, only edged up 50,000 b/d to 31.9 mbpd, compared with the non-OPEC increase of 126,000 b/d during last month.
The Paris-based IEA is predicting that non-OPEC supply will increase an average of 2.0 mbpd in 2018 but this hike is expected to ease to 1.7 mbpd heading into 2019.
The agency also predicts that “the call on OPEC crude is set to ease in 2019”, yet there could be adjustments between producer group members given the potential for production declines in Iran and Venezuela, declines that will be compensated for by other producers.
At the same time, the IEA forecast no change in demand growth predictions from its report in May, which indicated a 1.4 mbpd growth in demand for crude in 2018, reaching 99.1 mbpd.
A preliminary forecast for demand growth in 2019 indicated a potential expansion of 1.4 mbpd, rising to an annual average of almost 100.6 mbpd, according to the monthly report.
Nonetheless, some concern was expressed about instability on markets due to the economic or trade environment.
“Risks include possibly higher prices and trade disruptions,” the IEA said, noting that prices had briefly hit the USD 80 mark for Brent Crude during May.
Source: Kuwait News Agency