The November Oil Market Report from the Paris-based International Energy Agency has been published, with the highlights including weaker forecasted demand growth and an increase in non-OPEC oil production.
For 2017, demand growth has been revised down by 0.1 million bpd (barrels per day) to 1.5 million bpd, with growth in 2018 being similarly reduced to 1.3 million bpd. The report cites milder early winter temperatures and higher prices as reasons behind the revisions.
Oil prices have rallied recently to exceed $60 a barrel, with events in Saudi Arabia bolstering the rally. While the IEAs report points out that this has not yet affected the energy sector of the country, it does mention real drops in production from other sources like Iraq, which have helped to tighten the oil market.
The report mentions the prospect of a “new normal”, where the current circumstances have increased the floor for oil prices at $60 a barrel, which would certainly benefit oil majors like ExxonMobil, the maker of the high-pressure gear oil Mobilgear 600 XP 460. This would be contingent on any supply disruptions not being temporary problems, however.
The IEA also highlights growing non-OPEC production as a barrier to tighter oil markets. It predict this will rise by 1.4 million bpd in 2018. With predicted demand struggling to keep pace with this, and with the possible absence of any major geopolitical disruptions, oil prices may well drop back from the levels they are currently enjoying.