Economic Report 2017

E C ONOM IC R E P OR T 2 0 1 7

Gloďal oil demand is Ĩorecast to ďe ϵ7͘ϴ million ďoeƉd this year, an annual increase oĨ 1͘ϯ million ďoeƉd on 201ϲ͘ Although demand is groǁing, this is Ĩorecast to ďe the second consecutiǀe year ǁhen the rate oĨ groǁth has slow e d 10 ͘ This is Ɖartly due to the sloǁing edžƉansion oĨ the hinese economy, ǁith an annual Ɖrimary energy de m and gr ow t h r at e of 1.3 p e r ce nt last y e ar com p ar e d w it h an av e r age of 5 .3 p e r ce nt p e r annum b e t w e e n 2005 - 15 11 . M or e e fficie nt e ne r gy use is also a fact or .

Figure 11: Global Oil Demand and Supply

9 8

World D emand World Supply

9 6

9 4

9 2

9 0

Million boepd

8 8

8 6

8 4

0

2 010

2 011

2 012

2 013

2 014

2 015

2 016

Source: I E A

On the suƉƉly side, outƉut cuts declared ďy OW in Eoǀemďer last year haǀe taŬen eĨĨect in the Ĩirst halĨ oĨ this year͘ Oǀer the Ĩirst Ĩeǁmonths oĨ the agreement, comƉliance rates ǁere ǀery high, ǁith outturn suƉƉly ĨromOW and t h e 11 non- OP E C count r ie s low e r t h an w h at w as agr e e d. On 25 M ay 2017 at t h e 17 2 nd meeting oĨ OW , it ǁas Ĩormally announced that the 1͘ϴ million ďoeƉd cut in outƉut w ould b e e x t e nde d for a fur t h e r nine m ont h s fr om 1 J uly 2017 t h r ough t o t h e e nd of M ar ch 2018 . T h e nine - m ont h e x t e nsion w as agr e e d so t h at t h e e nd of t h e cut s w ould not coincide w it h t h e se asonal de cline in de m and at t h e start oĨ 201ϴ͘ ,oǁeǀer, the announcement did little to Ɖroǀide an uƉliĨt to the marŬet, instead shiĨting Ɖrices fur t h e r dow nw ar ds as m any inv e st or s conclude d t h at t h e p r op ose d cut s w ould not b e sufficie nt and com p liance r at e s w ould not b e h igh e nough t o dim inish glob al st ockp ile s. T h is sugge st s t h at it m ay b e m or e difficult t o ov e r com e t h e glob al ov e r sup p ly t h an p r e v iously ant icip at e d.

10 ^ee International nergy Agency ;I AͿ Oil Market Report at w w w .ie a.or g/ oilm ar ke t r e p or t / om r p ub lic 11 Se e BP Statistical Review of World Energy at hƩƉ͗ͬͬon͘ďƉ͘comͬ2dža 2ǀϴ

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