IEA revises up forecasts for global oil demand

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IEA revises up forecasts for global oil demand

"We are definitely seeing robust demand growth (in China)", said Neil Beveridge, senior oil analyst at Sanford C. Bernstein.

He blamed the lingering low crude oil prices to increased aggressive shale oil production by the US, although he noted that Nigeria and Libya were now being shielded from the pressures due to the exemption from output cut policy granted the duo by OPEC last January.

"We remain very optimistic ..."

There was more encouraging evidence surrounding oil demand. Further, there has been an increase in focus on the alternative source of energy throughout the world.

She continued, "Corpus Christi's proximity to the Eagle Ford formation and projected pipeline expansions connecting it to the Permian offer it access to cheap supplies, infrastructure projects, both private and public, will allow for greater export scale,"according to the Oil and Gas Journal".

Saudi Arabia produced 10.05 million barrels a day in June, the first time this year that its production has surpassed 10 million barrels a day.

"On a global scale, we're not eating away at the surplus", said J. Alexander Blackman, an executive at Standard Delta LLC, a trading company in Houston. "Major producers of oil were forced to reduce investment and production declined overall", CNN reported.

Whereas crude oil inventories in the United States dropped 7.6 million barrels in the week to July 7 to 495.35 million barrels, the biggest since the week ended September 4 suggesting that a decrease in the global glut is happening despite the current supply overhang.

Speaking yesterday in Abuja during a press briefing on developments in the oil market, the minister restated that Nigeria was committed to the OPEC deal, and would do whatever would be required to keep it intact.

Most of the drawdown in crude stocks is attributable to record refinery runs but slower imports likely played an important supporting role. Saudi Arabia's income from oil fell by 23 per cent a year ago, highly significant in an economy where around 73 per cent of total revenue comes from the industry.

He stressed that Nigeria had been an active member of OPEC for 46 years and that was the reason behind some of the cut analysis and strategies that were got from Saudi Arabia and other countries.

Kachikwu also said he would not attend a meeting between OPEC and non-OPEC nations on July 24 in Russian Federation, because he would be hosting a meeting of African oil producers in Abuja on the same day.

Oil prices dropped in recent weeks to levels not seen since November 2016 as investors lost faith in a deal between OPEC and non-OPEC producers to reduce output, while US shale oil production rose sharply. However, at present, no doctor can claim to have the right medicine to save the OPEC nations from the incoming crisis.

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