Higher Global Demand for Oil amid Dwindling Supply

The global oil demand gained momentum at a faster rate this year and it is still improving that could result to more inventories for the first quarter of the year, according to the  International Energy Agency (IEA) on Thursday.

The agency raised their forecast for oil demand to 9.3 million barrels per day (bpd) in 2018, from 97.8 million bpd in 2017.

Reports from IEA says that Commercial oil supply in industrialized OECD increased in January for the first time in seven months to  2.871 billion barrels, which is 53 million barrels higher than their five-year average.

However, the economic crisis reduced oil production by 50 percent in two years declined since more than a decade ago.  This could still trigger a decline in stocks.

There is a risk for the Venezuela city to have an accelerated contraction without any remunerative chance than other producers. It is likely that for the country to mark as the “final element” to bring the market into a deficit, based on the IEA.

Organization of the Petroleum Exporting Countries, Russia, and several other producers have agreed to reduce the production output by 1.8 million bpd from January 2017 until the end of 2018.

If in case the output of OPEC remains the same for the year, the IEA forecast a small augmentation in OECD inventories in the first three months of the year followed by a decline later on.

The agency anticipates the supply from non-OPEC nations to raise 1.8 million bpd in 2018  to 59.9 million bpd with the United States as the leading country. Crude output is expected to increase by 1.3 million bpd this year to more than 11 million bpd by the end of the year.