IEA cuts oil demand forecast

Oil market could tip out of balance on rising non-Opec production

"Even after some modest reductions to growth, non-OPEC production will follow this year's 700,000-bpd growth with 1.4 million bpd of additional production in 2018 and next year's demand growth will struggle to match this", the IEA said.

On the other hand OPEC demand for their oil is up to 33.42 million barrels per day (bpd) of OPEC crude next year, an increase of 360,000 bpd from its previous forecast and the fourth consecutive monthly increase in the projection from its first estimate made in July.

The IEA also released the 2017 edition of its World Energy Outlook Tuesday morning.

The benchmark report notes that with renewable energy technologies nipping at the heels of oil, natural gas and coal and a global push by policymakers to cut carbon emissions, juxtaposed with near-insatiable demand from a global population that will hit 9 billion within a few decades and the rise of the USA as the world's largest oil and gas producer, the energy sector is experiencing disruptive times.

The IEA echoed that view, saying it expects the U.S.to see a resurgence in its oil and gas industries and become the world's biggest net exporter by the end of the 2020s. "This is why, absent any geopolitical premium, we may not have seen a "new normal" for oil prices".

"I think this group of committed and responsible producers came together. and I think they will continue to do what it takes to take us to the next level", he said at an worldwide oil conference.

But the price crash had another effect: it forced a wave of innovation that has improved shale producers' productivity and efficiency.

Compliance by the group with its joint 1.8-million-bpd output cut with 10 partners was 96 percent in October, the highest since the supply-reduction deal took effect in January.

Crude has climbed lately to a two-year high around $57 USA a barrel in trading in NY, although it is not seen making much larger gains due to rising U.S. output.

The U.S. shale surge could also mean an era of lower-for-longer oil prices. "Electric vehicles are in the fast lane as a result of government support and declining battery costs, but it is far too early to write the obituary of oil as growth for trucks, aviation, petrochemicals, shipping, and aviation keep pushing demand higher".

The report from the Paris-based agency will come as grim news for officials attending global climate talks in Bonn, Germany, as they grapple with ways to contain carbon emissions.

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