Lagos — The International Energy Agency, IEA, has said the oil market will remain oversupplied in 2020 despite efforts by OPEC and partners to curb excesses and push up prices by cutting an extra 500 000 barrels per day starting from January.
“Despite the additional curbs … and a reduction in our forecast of 2020 non-OPEC supply growth to 2.1 million barrels per day (bpd), global oil inventories could build by 700,000 bpd in Q1 2020,” IEA said in a monthly report.
In its last meeting, OPEC+ made an extra output cut of 500, 000 barrels per day to the ongoing 1.2 million barrels per day cut.
However, IEA said even if the group succeeds in withdrawing an extra 500 000 barrels per day from the market, only 530,000 bpd of crude would actually be held away from the market compared to November production.
OPEC+ output is set to outstrip projected demand for its crude by 700,000 bpd in the first half of next year and by 1 million bpd in the second half, the IEA said.
The IEA reduced its forecast for supply growth by non-OPEC countries in 2020 by 200,000 bpd “on a continued slowdown in the U.S., reduced expectations for Brazil and Ghana as well as additional cuts by (OPEC’s allies)”.