Published: Fri, October 13, 2017
Economy | By Annette Adams

Oil prices sink after International Energy Agency's outlook

Oil prices sink after International Energy Agency's outlook

Oil prices edged up on Wednesday, rising for a third day on signs that markets are gradually tightening after years of oversupply, although the outlook for 2018 remained less certain.

The monthly OPEC oil market report noted that, based on secondary sources, Angola produced 1.641 million barrels in September, a monthly drop of 2,900 barrels, while Nigeria increased production by 50,800 barrels to 1.855 million barrels.

At the end of 2016, OPEC and 11 independent producers -Azerbaidzhan, Bahrein, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan- agreed to reduce oil production by 1.8 million barrels per day.

According to the EIA, crude inventories fell by 2.7 million barrels in the week to October 6 compared with analysts' expectations for a decrease of 2 million barrels. Distillate stocks fell by 1.5 million barrels, short of expectations for a drop of 2.2 million barrels.

Meanwhile, the agency forecast that USA oil demand for 2017 is set to grow by 230,000 bpd compared with previous forecast of 350,000 bpd.

Separately, U.S. President Donald Trump was expected Thursday to announce a de-certification of the 2015 nuclear deal with Iran, putting its future into question. This likely means OPEC must deepen its production cuts to finish its job of bringing oil stocks back to the five-year average.

"Our forecast of global demand growth remains unchanged at 1.6 million barrels per day in 2017, or 1.6 percent, and 1.4 million barrels per day in 2018, or 1.4 percent", said the report. For 2018, oil demand is expected to rise by 420,000 bpd vs 400,000 bpd previously.

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