IEA cuts estimates for oil needed from OPEC
The International Energy Agency (IEA) has cut its estimates for the amount of crude needed from the Organization of the Petroleum Exporting Countries (OPEC) this year and in 2018.
The reduction came as the IEA lowered its historical assessments of consumption in some emerging nations.
The agency said in its monthly report that world oil markets were re-balancing as the OPEC and its allies implement production cuts. Still, inventories remain high and the volume of crude needed from OPEC is less than previously thought as consumption in some developing nations had been overestimated, Bloomberg quoted the IEA as saying in its report.
OPEC and non-OPEC producers such as Russia have been implementing an agreement since January to knock off 1.8 million barrels per day (bpd) from their production but prices have kept falling.
The IEA further in its report lowered projections for the amount of crude required from OPEC this year and next by about 400,000 bpd. About 32.6 million bpd will be needed from the group this year, less than the 32.84 million it pumped in July, Bloomberg reported.
There are also growing doubts that all the countries involved in the accord to reduce supply are fully committed, the IEA said.
OPEC’s rate of compliance with the cutbacks slipped last month to 75 percent, the lowest since the accord started in January. Iraq’s implementation was just 34 percent, Venezuela’s 28 percent and the U.A.E.’s 53 percent. Adherence among the non-members coordinating with OPEC was at 67 percent.
Despite the reduction in total demand estimates, the rate of growth for this year is stronger than previously thought, at 1.5 million barrels a day.