World oil production climbs again; but so should demand, agency says

West Texas Intermediate oil for November delivery fell 56 cents to $50.79 a barrel on the New York Mercantile Exchange.

US crude futures for November delivery were steady at $50.80 a barrel, close to Monday’s four-month high of $51.60 a barrel.

This means production outside the cartel is expected to jump by 240,000 barrels per day next year compared to this year, a slightly higher revision of its initial forecast.

However, sounding a note of caution, Fritsch said he had “significant doubts whether the (production cut targets) will actually be fulfilled” as rivalry between OPEC members, who are fighting aggressively for global markets share, could prevent an effective deal.

In September OPEC members agreed a production cut of 700,000 bpd to bring output down to 32.5-33 mn bpd “in order to accelerate the ongoing drawdown of the stock overhang and bring the rebalancing forward”, according to an OPEC statement.

In Istanbul, meanwhile, OPEC has issued an invitation to Russian Federation and other key non-members of the oil organization to attend a meeting later this month aimed at rebalancing crude prices after historic lows, the Qatari energy minister said on Wednesday.

His words have caused oil to slip a little off its best levels from Monday, with both major benchmarks lower by around 1% so far on the day.

World oil output grew by 200,000 barrels per day on the year, or about two-tenths of a percent, to 97.2 million barrels per day, the IEA report said. Saudi Arabia, Kuwait and the United Arab Emirates held supply at or near historic highs; Iran sustained volumes at 3.7 million barrels per day, at pre-sanctions levels.

Traders said that prices were boosted by record Indian oil imports. OPEC has not decided how it will achieve production cuts including which countries will agree to sacrifice output. Russia, which has pledged to join OPEC in cutting output, is set to join the Istanbul meeting later on Wednesday. Since the middle of 2014, the price of a barrel of oil was halved due to overproduction.

The IEA report came just one day after Russian President Vladimir Putin spoke at an energy conference in Istanbul. A deal could lift prices as high as $60 by the end of this year, Saudi Arabia’s Energy and Industry Minister Khalid Al-Falih said at the World Energy Congress in Istanbul.

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