Paris-based International Energy Agency (IEA) released its monthly oil market report on Thursday. The report stated global supply and demand for crude oil will be balanced three out of the four quarters in 2018, assuming OPEC production and normal weather conditions remain in place.
OPEC compliance for its output restrictions of 1.2 million bpd currently sits at 86 percent for the year. This output crunch is supposed to remain until March next year, and with its partners Russia, Oman and Kazakhstan, should total 1.8 million bpd.
Let’s also not forget about demand for OPEC’s crude. Demand is projected to surpass supply (if September output numbers stick) for Q4 2017, hitting 32.98 million bpd. This demand will drop slightly for Q1 2018 to 31.87 million bpd.
Non-OPEC crude output specifically from the United States is expected to rise 1.5 million in 2018, to hit 59.6 million bpd, according to the IEA.
The IEA advised, “A lot has been achieved towards stabilizing the market, but to build on this success in 2018 will require continued discipline.”
And with global demand on the rise, the IEA is still calling for the global oil market to be balanced in 2018 despite a rise in output. IEA said, “This might act as the ceiling for aspirations of higher oil prices.”