The global oil market will likely show a surplus in the first half of 2018, as rising US supply offsets OPEC's discipline in maintaining its production cuts for the whole of next year, the International Energy Agency (IEA) said on Thursday, reports Reuters.
"Total supply growth could exceed demand growth: indeed, in the first half the surplus could be 200,000 barrels per day (bpd) before reverting to a deficit of about 200,000 bpd in the second half, leaving 2018 as a whole showing a closely balanced market," the Paris-based IEA said in its monthly oil market report.
"A lot could change in the next few months but it looks as if the producers' hopes for a happy New Year with de-stocking continuing into 2018 at the same 500,000-bpd pace we have seen in 2017 may not be fulfilled."
The IEA left its forecast for global oil demand growth unchanged for 2017 at 1.5 million bpd, marking a rise of 1.6 per cent, and for 2018, at 1.3 million bpd, equal to an increase of 1.3 per cent.
Production from outside the Organisation of the Petroleum Exporting Countries (OPEC) is expected to have risen by 600,000 bpd this year, before increasing by 1.6 million bpd next year.
The IEA last month predicted non-OPEC supply would increase by 1.3 million bpd in 2018, but the pace of growth in US shale output prompted the agency to raise its forecast for total US crude output growth to 870,000 bpd for next year, up from a forecast for an increase of 790,000 bpd in its November report.
OPEC and 10 of its partners, including Russia, agreed in November to extend a 1.8-million bpd supply cut throughout the whole of 2018 to force a drawdown in global inventories and support crude prices.
The IEA said OECD commercial stocks fell by 40.3 million barrels in October to 2.94 billion barrels, the lowest since July 2015 and 111 million barrels above the five-year average, which is OPEC's target for inventories.
Another report from Singapore adds: Oil markets rose on Thursday, lifted by a fourth straight weekly fall in US crude inventories, though climbing output capped prices well below the 2015 highs reached earlier this week.
US West Texas Intermediate (WTI) crude futures were at $56.77 a barrel at 0752 GMT, up 17 cents, or 0.3 per cent from their last settlement.
Brent crude futures, the international benchmark for oil prices, were at $62.84 a barrel, up 40 cents, or 0.6 per cent from their last close.
US crude oil stockpiles fell by 5.1 million barrels in the week to Dec. 8, the fourth consecutive week of decline, to 442.99 million barrels, the lowest since October 2015.
Traders said reports that the Organisation of the Petroleum Exporting Countries (OPEC), Russia and other non-OPEC producers may be planning output cuts beyond the current timeframe which sees curbs until the end of 2018, also supported Brent.
Despite the price gain, Brent was well below $65.83 a barrel, the June 2015 high touched earlier this week. It hit that level after the Forties pipeline - which carries significant amounts of the North Sea crude used to underpin Brent crude futures - was shut down due to cracks.