World crude inventories are expected to drop by 300,000 barrels per day for 2017, as long as OPEC production remains at current levels, International Energy Agency (IEA) said in a new report.
“Data is of course subject to revision, but we can now clearly see a major reduction in floating storage, oil in transit, and stocks held in some independent areas,” IEA said in its monthly report. It said each quarter in 2017 showed a drop except for a small build-up in the first quarter.
The Organization of Petroleum Exporting Countries (OPEC) member states produced 32.75 million barrels per day in September, OPEC said on Wednesday in its monthly oil report. Output increased by year-on-year by 88,000 bpd with Libya, Nigeria and Iraq ramping up production following internal conflict.
IEA said that in the 35-member OECD countries, the five-year average stock overhang is now down to 170 million barrels from 318 million billion at the end of January and stocks have fallen in months when they normally increase, offsetting net builds in China.
For its 2018 outlook, IEA said the three out of four quarters will be “roughly balanced,” on current OPEC production and normal weather conditions. It pointed to a slight stock-build in the first quarter of next year.
“Taking 2018 as a whole, oil demand and non-OPEC production will grow by roughly the same volume and it is this current outlook that might act as the ceiling for aspirations of higher oil prices,” the report said.
The next few weeks ahead of the producers’ meeting in Vienna on 30 November will be crucial in shaping the decision of leading oil producers on output, IEA said, adding that a lot has been achieved towards stabilising the market, but to build on this success in 2018 will require continued discipline.