(Adds detail, background)
By Noah Browning
LONDON, July 12 (Reuters) - Surging U.S. oil output will
outpace sluggish global demand and lead to a large stocks build
around the world in the next nine months, the International
Energy Agency (IEA) said on Friday.
The forecasts appear to predict the need for producer club
OPEC and its allies to reduce production to balance the market
despite extending their existing pact, forecasting a fall in
demand for OPEC crude to only 28 million barrels per day (bpd)
in early 2020.
"Market tightness is not an issue for the time being and any
rebalancing seems to have moved further into the future," the
IEA said in its monthly report.
"Clearly, this presents a major challenge to those who have
taken on the task of market management," it added, referring to
the Organization of the Petroleum Exporting Countries and
producer allies such as Russia.
The demand for OPEC crude oil in early 2020 could fall to
only 28 million bpd, it added, with non-OPEC expansion in 2020
rising by 2.1 million bpd -- a full 2 million bpd of which is
expected to come from the United States.
At current OPEC output levels of 30 million bpd, the IEA
predicted that global oil stocks could rise by 136 million
barrels by the end of the first quarter of 2020.
Maintaining its forecasts for oil demand for the rest of
2019 and 2020, the Paris-based agency cited expected improvement
in U.S.-China trade relations and U.S. economic expansion as
encouraging but flagged tailwinds elsewhere.
"There are indications of deteriorating trade and
manufacturing activity. Recent data show that global
manufacturing output in 2Q19 fell for the first time since late
2012 and new orders have declined at a fast pace," it said.
The IEA said that markets were concerned by escalating
tension between Iran and the West over oil tankers leaving the
Gulf but that incidents in the region's shipping lanes have been
overshadowed by supply concerns. "The oil price impact has been minimal with no real security
of supply premium," the IEA said. "For now, maritime operations
in the region are close to normal and markets remain calm."
Tightened U.S. sanctions on Iranian crude drove down
Tehran's June exports by 450,000 bpd to 530,000 bpd, near
three-decade lows.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Total Non-OPEC Supply https://tmsnrt.rs/32qE4Dx
Demand for OPEC crude oil https://tmsnrt.rs/2NRWBWl
Global oil demand growth https://tmsnrt.rs/32pPJmg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>