The global supply glut has presented many challenges to the world’s largest oil producing companies, as well as big oil businesses like Mobil, which makes Mobil Delvac SGO 75W90, but the current oversupply appears set to continue.
According to the International Energy Agency, the current oil glut, which has also seen billions of pounds worth of investment in energy companies slashed, will continue into 2017, as bloating stocks prevent a recovery in oil prices.
Unless there is a bigger than expected decrease in output from non-Organization of the Petroleum Exporting Countries (OPEC) producers in 2016, or an increase in demand growth, the International Energy Agency’s (IEA) medium-term outlook released on Monday says “it is hard to see oil prices recovering in the short term”.
The IEA also said:
“The enormous stocks being accumulated will act as a dampener on the pace of recovery in oil prices.”
It goes on to comment that the previous belief that peak oil supply would lead to a never-ending increase in oil prices was incorrect.
The agency, which is based in Paris, expects oil output globally to rise by around 4.1 million barrels per day between 2015 and 2021, which is much less than the 11 million barrels per day that were produced between 2009-2015, as low oil prices affect exploration and capital expenditure.
However, the IEA believes that supply will remain steady in 2017, following a predicted decline of 600,000 barrels per day in 2016, with an expected recovery in 2018.