IEA Reveals a Big Surprise for Oil Bulls

Lloyd Doyle
March 17, 2019

Crude oil future prices were volatile Friday morning after reaching highs for the year earlier this week, with the immediate focus remaining on potential geopolitical supply issues.

United States crude oil demand in 2019 is expected to rise by 360,000 barrels to 20.81 million barrels per day, a former Energy Information Administration (EIA) for an increase of 350,000 barrels per day. The report said rising production outside the group pressed the need for continued restraint by OPEC+.

The U.S. bank said January global crude oil demand growth was "nearly 2.0 million barrels per day, with strength visible in both emerging markets and developed economies".

The Organisation of Petroleum Exporting Countries reduced production by 221,000 bpd in February, a more modest reduction than in prior months.

With OPEC withholding supply and US sanctions preventing Iranian and Venezuelan oil from entering markets, global crude flow data in Re-definitive showed a slight supply deficit likely appeared in the first quarter.

"OPEC's compliance was a robust 94 percent, compared to 51 percent from non-OPEC", said the IEA, adding that major producer Russian Federation was continuing to adjust its production gradually.

But oil demand has held up well so far. We will observe the economic-political consequences of the USA cornering Saudi Arabia, Iran and Venezuela in the global oil game.


The agency's monthly report indicates that the lower production out of the troubled country could be a "challenge" for the world's oil markets.

During President Obama's term, the USA, which changed its policy after more than 40 years in 2013, in addition to lifting the ban on oil and natural gas exports, has also chose to turn into an economy that will meet only 11 percent of its annual energy needs with imports by 2020 from an economy that was responding to its annual energy demand of 65 percent with imports in 2013.

The March 17-18 meetings in Baku, Azerbaijan, will be the first ministerial gathering of the Opec+ coalition after Saudi Energy Minister Khalid Al-Falih stressed last month the need to continue with the production cuts.

US crude ended the week 4.1 percent higher, and Brent was up 1.9 percent.

The Bloomberg story, citing unnamed sources, curbed a price rally fueled by production curbs by OPEC and its partners along with US sanctions on Iran and Venezuela that have tightened global supplies this year.

In a Financial Times news article, according to market research firm Rystad Energy's predictions, we will experience a 2019 where very shocking changes that would not have come to mind will take place in the global energy market. The country's gross crude oil exports are set to reach 4.2 million bpd by 2024, while total exports of its crude and refined products should touch 9mbpd then, the IEA said in its oil outlook, indicating Washington has a tangible chance of surpassing Russian Federation and even Saudi Arabia as an exporter. The newspaper article also states that USA energy gains will have a price for the environment and that Change.org has described the situation as a "climate disaster".

Other reports by Iphone Fresh

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