IEA: Oil Glut Worsens As OPEC Market-Share Battle Just Beginning

IEA: Oil Glut Worsens As OPEC Market-Share Battle Just Beginning
IEA warns of a global oil glut building due to Saudi Arabia pumping at near-record highs in an attempt to win a market-share battle against US shale production.

Reuters

LONDON, May 13 (Reuters) – A global oil glut is building as OPEC kingpin Saudi Arabia pumps near record highs in an attempt to win a market-share battle against stubbornly resistant U.S. shale production, the International Energy Agency (IEA) said on Wednesday.

The West's energy watchdog said in a monthly report that although higher-than-expected oil demand was helping to ease the glut, growth in global oil consumption was far from spectacular.

As a result, signs are emerging that the crude oil glut is shifting into refined products markets, which could make a recent rally in oil prices unsustainable.

"Despite tentatively bullish signals in the United States, and barring any unforeseen disruption elsewhere, the market's short-term fundamentals still look relatively loose," said the IEA, which coordinates energy policies of industrial nations.

Global oil production exceeds demand by around 2 million barrels per day, or over 2 percent, following spectacular growth in U.S. shale production and OPEC's decision last year not to curtail output in a bid to force higher-cost U.S. producers to cut theirs.

As a result, benchmark Brent oil prices more than halved from June 2014 to $46 per barrel in January. They have since rebounded to around $65, however, on fears of a steep slowdown in U.S. production growth.

"In the supposed standoff between OPEC and U.S. light tight oil (LTO), LTO appears to have blinked. Following months of cost cutting and a 60 percent plunge in the U.S. rig count, the relentless rise in U.S. supply seems to be finally abating," the IEA said.


123

View Full Article

Copyright 2017 Thomson Reuters. Click for Restrictions.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Category Specialist III
Expertise: Purchasing
Location: Anchorage, AK
 
Financial Reporting Analyst
Expertise: Accounting
Location: Houston, TX
 
Supply Chain Coordinator
Expertise: Supply Chain Management
Location: Houston, TX
 
search for more jobs

Brent Crude Oil : $51.46/BBL 4.63%
Light Crude Oil : $48.9/BBL 4.78%
Natural Gas : $3.18/MMBtu 0.90%
Updated in last 24 hours