More than three billion barrels of spare oil are floating around on the world market, according to the worldwide Energy Agency (IEA).
“Instead, traders took a “glass half full” approach to the IEA’s report, focusing on oil demand growing at its fastest pace in five years and the prediction of slower non-OPEC output in 2016″. He further stated that this would also have further implications for overall oil markets in time to come.
Commercial stocks from countries in the Organization for Economic Cooperation and Development stood at a record near 3 billion barrels by the end of September, even as the global oil market adjusts to oil trading at $50 a barrel oil.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest oil-storage hub in the USA, expanded by 2.24 million barrels through November 6, the EIA report showed Thursday.
There are signs the a few fuel storage depots in the eastern hemisphere have been filled to capacity, the agency said. When refinery inputs increase, it is usually bullish for crude oil prices.
Yet unrest in Iraq, now OPEC’s second-largest producer, and aging infrastructure could hamper raising output there. That was less than the 6.3-million-barrel rise reported by the American Petroleum Institute on Tuesday, but far more than the 1.1-million-barrel increase expected by analysts polled by The Wall Street Journal. We see less non-OPEC supply.
Europe imports over 9 million barrels a day of crude from outside the region, with sour grades accounting for two-thirds of that, according to the IEA. OPEC ministers will meet on December 4 in Vienna to review their current policy. This comes as demand growth is still under one million barrels per day, vast declines in investments and major cutbacks in production.