A weakening global economy and the prospect of additional Iranian barrels mean that global oil demand may not catch up with supply until the year after next. Low oil prices too are unlikely to go away anytime soon, with bumper volumes from Saudi Arabia and Iraq, and Iran’s expected return to the market post-sanctions, fingered as the key culprits.

The IEA in its latest monthly oil market report, released 13 October, cuts its forecast for 2016 global oil demand growth to 1.2mn b/d, from 1.4mn b/d a month earlier. This means that demand will take longer to catch up with supply which continues at bumper levels despite falling US shale output. Somewhat ironically, given that some of its members – in particular Venezuela and Algeria – continue to call for action to shore up prices (which continue to hover around $50/B for Brent, less than half mid-2014 levels), Opec itself is now seen as the main ‘culprit’ in the continued growth of global oil supply. (CONTINUED - 1178 WORDS)