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The latest tumble in the price of oil, which hit a six-year low in August, is expected to cut non-OPEC supply in 2016 by nearly 0.5 million barrels per day (mbpd) – the biggest decline in more than two decades, the International Energy Administration (IEA) said in its oil market report for September.
According to IEA, lower output in the United States, Russia and North Sea is expected to drop overall non-OPEC production to 57.7 mbpd.
Besides, oil prices dropped on Monday as weakening demand weighed on markets.
Light sweet crude for October delivery fell by 0.34 to $44.20 per barrel on crude oil futures quotes.
Front-month Brent crude futures were down by 29 cents at $47.85 per barrel at 0649 GMT, although U.S. crude futures were at $44.62.
IEA said in the report that OPEC crude supply fell by 220 000 barrels per day (220 kbpd) in August to 31.57 mbpd, led by declines in Saudi Arabia, Iraq and Angola.
“The group’s output stood 1.2 mbpd higher than a year earlier. The “call” on OPEC climbs to 31.3 mbpd in 2016, up 1.6 mbpd year-on-year as lower prices dent non-OPEC supply and support above-trend demand growth”, it said.
Global oil demand growth is expected to climb to a five-year high of 1.7 mbpd in 2015, before moderating to a still above-trend 1.4 mbpd in 2016 thanks to lower oil prices and a strengthening macroeconomic backdrop.
IEA disclosed that OECD oil inventories swelled by a further 18 mb in July to a record 2 923 mb. “Robust refinery throughput pushed crude stocks 9.9 mb lower, while refined products added 26.7 mb. At end-July, product stocks covered 31.2 days of forward demand, 0.6 day above end-June. Preliminary data suggest there were further builds in August.
