Speaking to Reuters in Oslo on the sidelines of a conference, Toril Bosoni, the head of the oil industry and markets division at the International Energy Agency (IEA), has said that next year will see a slight surplus in the supply of crude oil.
This is set to come even if the countries participating in the OPEC+ group continue their current cuts. At its June policy meeting, ministers from OPEC+ countries agreed to continue a wide-ranging package of production cuts totalling 3.66 million barrels per day (bpd).
On top of this, top OPEC+ producers Russia and Saudi Arabia have pledged further voluntary cuts that take the total to 5.16 million bpd, which is equivalent to about 5% of the world’s demand for oil.
Despite this helping to push oil prices up to a high of $98 per barrel in September, prices have since slid back to the low $80s on concerns about demand. Growth in non-OPEC+ production has also compensated for the production cut, such as from US shale producers like Chevron and ExxonMobil, the makers of the Texaco and Mobil lubricant and coolant ranges.
Nevertheless, Bosoni cautioned that the oil markets were in a fragile state, saying:
“Global oil stocks are at low levels, which means that you risk increased volatility if there are surprises on either the demand side or the supply side.”
She said that with demand currently outstripping supply, stock levels were decreasing rapidly. It has also been rumoured that the OPEC+ group may consider deepening its cuts to support oil prices.