IEA says expects oil glut in Q1 despite new OPEC+ cuts

MOSCOW, Dec 12 (PRIME) – The international oil market will have a 0.7 million barrels per day surplus between January and March next year despite an OPEC+ states decision to deepen existing cuts, the International Energy Agency (IEA) said in a report on Thursday.

“In this Report we have reduced our forecast for non-OPEC production growth next year from 2.3 mb/d to 2.1 mb/d to take account of lower output from participants in the OPEC+ deal and a weaker growth outlook for Brazil, Ghana and the United States. Even so, with our demand outlook unchanged, there could still be a surplus of 0.7 mb/d in the market in 1Q20,” it said.

The IEA also said that Russia fulfilled the OPEC+ oil production cut agreement by 74% in November after 81% in October,.

Russia’s oil and gas condensate output decreased by 130,000 barrels per day in November compared to October to 11.24 million barrels per day, but remained 55,000 barrels higher than stipulated by the OPEC+ agreement.

The non-OPEC states fulfilled the deal by 61% in November after overfulfilling the terms of the deal by 3% in October.

OPEC states overfulfilled the deal by 54% in November compared to 15% in October.

OPEC’s oil production decreased by 300,000 barrels per day in November compared to October to 29.66 million barrels per day.

In November 2016, OPEC and non-OPEC states including Russia first decided to reduce their oil output to rebalance the market, and agreed on additional reduction in December 2018. In July, they prolonged the deal until April 2020. According to the latest amendments, the agreement stipulates a production cut by 2.1 million barrels per day.

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