The IEA called the condition for the transition to the deficit in the oil market

Photo: ROBYN BECK / AFP

The world oil market may already in 2017 to move from oversupply to shortages, according to the International energy Agency (IEA). The condition for this will be the implementation of the Algiers agreements of OPEC

The world oil market may move from surplus to deficit in 2017, if they implemented reached by OPEC in Algiers agreement, according to which the total volume of production of the countries of cartel needs to be reduced to 32.5-33 million barrels. a day, the IEA predicts in its November report. At the same time, the Agency recognizes that if any of the OPEC countries will continue to increase production, throughout 2017, the oversupply in the market will continue and the chances of a significant rise in oil prices will be a little.

According to OPEC, in October 2016, oil extraction has grown in comparison with October of last year by 0.8 million barrels per day. Despite the decline in production in countries outside OPEC, the effect of this is offset by the continuing rise in production in the cartel in October, according to the IEA, it reached a record 33 to 83 million barrels a day, 1.3 million barrels more compared to last October.

Within OPEC production growing for the fifth month in a row. The IEA notes the recovery of production in Nigeria, Libya, increasing production to record levels (4.59 million barrels per day) in Iraq.

The Agency emphasizes that the main factor influencing the restoration of balance of supply and demand in the oil market will be, regardless of its outcome, the meeting of OPEC in Vienna, scheduled for November 30. At the same time, the IEA indicates that production growth in exporting countries outside the cartel, Russia, Canada, Kazakhstan and Brazil. In 2017, the Agency predicts production growth in these countries by 0.5 million barrels per day compared with a decline of 0.9 million barrels for 2016.

Russia is ready for the freezing of oil production, told reporters on 10 November at the conference of the savings Bank the head of Ministry Alexander Novak. However, he noted that, since the forecast assumes production growth in Russia, it will “essentially decrease”. The Minister also noted that now the countries-exporters more likely to compromise than it was in April at negotiations in Doha. In the case that an agreement to limit production on 30 November are achieved, Russia will take over the “base” the November level of production. In October, oil production in Russia amounted to 11.2 million barrels per day — the highest in the last 25 years.

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