IEA: Oil Market Could Drown in Global Oversupply
01/20/2016 - Oil prices might continue to fall in 2016 as the world is poised to withdraw more from the Earth than it needs, according to the International Energy Agency.
In its monthly report for January, the agency wrote that the world is facing a potential surplus of 1.5 million barrels per day in the first half of the year as demand growth slows and Iran prepares to begin exports.
Although production from countries outside OPEC is expected to drop by about 600,000 barrels per day, Iranian exports likely will offset the decline and drive a surplus, it said.
“The oil market faces the prospect of a third successive year when supply will exceed demand by 1 million barrels per day and there will be enormous strain on the ability of the oil system to absorb it efficiently,” the agency wrote.
“While the pace of stock-building eases in the second half of the year as supply from non-OPEC producers falls, unless something changes, the oil market could drown in oversupply.”
Although production from countries outside OPEC is expected to drop by about 600,000 barrels per day, Iranian exports likely will offset the decline and drive a surplus, it said.
“The oil market faces the prospect of a third successive year when supply will exceed demand by 1 million barrels per day and there will be enormous strain on the ability of the oil system to absorb it efficiently,” the agency wrote.
“While the pace of stock-building eases in the second half of the year as supply from non-OPEC producers falls, unless something changes, the oil market could drown in oversupply.”
