MOSCOW, October 11. /TASS/. The decision of OPEC member-countries on crude production cap will foster the market's rebalancing, according to the Oil Market Report for October released by the International Energy Agency (IEA) on Tuesday.
Meanwhile, if the OPEC decision on oil output cap is cancelled or not implemented, the oversupply may persist till the second half of 2017, the agency said.
"Even with tentative signs that bulging inventories are starting to decline, our supply-demand outlook suggests that the market - if left to its own devices - may remain in oversupply through the first half of next year. If OPEC sticks to its new target, the market’s rebalancing could come faster," the report said.
On September 28, OPEC member-nations agreed to cut supply to between 32.5 and 33 mln barrels per day at the informal meeting within the International Energy Forum in Algiers, with details to be set by end-November.
According to IEA, "other critical details - like individual country allocations, production baseline and implementation date - need to be finalized when OPEC meets on 30 November."
"A significant rebound in supply from Libya and Nigeria and further growth from Iran would suggest that bigger cuts would have to be made by others, such as Saudi Arabia, to meet the new output target," the report said.
In the third quarter of 2016, growth of global crude demand dropped to a four-year low "due to vanishing OECD growth and a marked deceleration in China," IEA said. In September, crude supply from OPEC member-states climbed to an all-time high of 33.64 mln barrels per day, the report said.
The International Energy Agency has upgraded its forecast for global oil demand for 2016 by 200,000 barrels per day versus its September’s outlook, to 96.3 mln barrels per day, IEA said in its Oil Market Report for October released on Tuesday.
The projected global oil demand for 2017 has also been upgraded by 200,000 barrels per day, to 97.5 mln barrels per day.
Oil prices are growing after the news about Russia being ready to join the OPEC decision on limiting oil production, announced by the Russian President Vladimir Putin at the World Energy Congress 2016 in Istanbul.
According to Minister of Energy, Industry and Mineral Resources of Saudi Arabia Khalid al-Falih, the oil price will top $60 per barrel by the end of 2016.