International Energy Agency paints a bleak picture
In their November Oil Market Report, the International Energy Agency (IEA) warned that "2017 could be another year of relentless global supply growth" and demand will likely not increase fast enough to keep up with expanded supply.
Among this month's key highlights:
- OPEC crude output rose by 230,000 bbl/day in October to a record 33.83 million bbl/day on higher output from Nigeria, Libya and Iraq. October marks the fifth consecutive monthly increase for the cartel.
- Global oil supply rose 800,000 bbl/day in October to 97.8 million bbl/day on expanded output from just about everywhere.
- Year-over-year, world oil output is up 800,000 bbl/day. OPEC production has grown by 1.3 million bbl/day over the past 12 months, offsetting a 900,000 bbl/day decline in non-OPEC countries (mostly the US).
- Total non-OPEC production is expected to grow by 500,000 bbl/day next year, led by Brazil, Canada, Russia and Kazakstan. Output from Russia (the world's largest crude oil producer) has increased by 230,000 bbl/day in 2016 and expects to add another 200,000 bbl/day next year.
The IEA says the outlook is bleak for oil prices unless OPEC gets serious about production cuts, noting "Whatever the outcome, the Vienna meeting will have a major impact on the eventual - and oft-postponed - rebalancing of the oil market ... If the supply surplus persists in 2017, there must be some risk of prices falling back."
Russian Energy Minister Alexander Novak remains confident a deal will be reach in Vienna, which would at least freeze output at November's record high levels.
The next OPEC meeting is November 30, 2016.