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Next year’s oil balance is expected to be tighter than 2015

Published Tuesday, September 15th, 2015

We can draw one obvious conclusion after the release of the latest OPEC monthly report yesterday. That is that as far as global supply/demand balance is concerned the order will not change from 2015 to 2016: the EIA is the most bearish with calls for both years on OPEC crude at 28.75 mbpd and 29.75 mbpd respectively. They are followed by OPEC who sees demand for their crude at 29.34 mbpd for the whole of 2015 and 30.30 mbpd for 2016. The most bullish is the IEA with 29.70 mbpd and 31.30 mbpd.

Friday’s report from the IEA, as pointed out on these pages yesterday, was in stark contrast with the EIA’s projection. The former sees a much tighter 2016 balance than the latter, mainly due to both a big upward revision in global demand and a downward revision in non-OPEC supply due to low oil prices. The latest figures from OPEC are also more bullish for 2016 than a month ago but this improvement comes from a 140,000 bpd downward revision in non-OPEC supply and not so much from healthier demand projections. The table below sums up the changes.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.