- Title: Oil prices will be much more volatile in 2017 - IEA
- Date: 15th January 2017
- Summary: ABU DHABI, UNITED ARAB EMIRATES (JANUARY 15, 2017) (REUTERS) EXECUTIVE DIRECTOR OF THE INTERNATIONAL ENERGY AGENCY (IEA), FATIH BIROL, WALKING INTO INTERVIEW AND SITTING DOWN IEA EXECUTIVE DIRECTOR BIROL TALKING TO JOURNALIST (SOUNDBITE) (English) IEA DIRECTOR FATIH BIROL, SAYING: "I would expect that we will see a rebalancing of the markets within the first half of this year but what I want to say is that we are entering a period of much more volatility in the markets in my view. As we said in November last year, the name of the game is volatility." JOURNALIST TAKING NOTES (SOUNDBITE) (English) IEA EXECUTIVE DIRECTOR, FATIH BIROL, SAYING: "I expect the U.S. shale oil will go back to increasing the production this year, 2017. U.S. oil production can start to increase again. This is one reaction in the market. The second reaction is, I expect, if the prices go higher and higher we may well see that the global oil demand growth can be weakened which means again more oil in the markets. And third, there are some countries, major importers like China, they do also produce oil and recently the Chinese oil production was in decline because of the low prices, I would expect with higher prices, as a result of the OPEC agreement, we may well see this decline trends may be reversed and the Chinese oil imports can be affected with that." IEA OIL CHIEF CLASPING HIS HANDS (SOUNDBITE) (English) IEA DIRECTOR FATIH BIROL, SAYING: "In 2017, this year, if there are no major, major underlined, investments coming we may well see in a few yearsâ€™ time, significant supply-demand gap with serious implications on the markets." JOURNALIST WRITING NOTES
- Embargoed: 29th January 2017 15:25
- Keywords: Oil Opec markets International Energy Agency
- Location: ABU DHABI, UNITED ARAB EMIRATES
- City: ABU DHABI, UNITED ARAB EMIRATES
- Country: United Arab Emirates
- Topics: Organization of the Petroleum Exporting Countries,Government/Politics
- Reuters ID: LVA0015Z6XQ4T
- Aspect Ratio: 16:9
- Story Text: Global oil prices will witness "much more volatility" in 2017 even though markets may rebalance in the first half of the year if output cuts pledged by producers are implemented, the head of the International Energy Agency (IEA) said on Sunday (January 15).
The Organization of the Petroleum Exporting Countries (OPEC) agreed on Nov. 30 to cut output by 1.2 million bpd to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed by independent producers such as Russia, Oman and Mexico.
"I would expect that we will see a rebalancing of the markets within the first half of this year," said Fatih Birol, executive director of IEA, the Paris-based global energy watchdog.
"But what I want to say (is) that we are entering a period of much more volatility in the market ... the name of the game is volatility," he told Reuters Television in Abu Dhabi.
Prices fell on Friday (January 13) and ended the week 3 percent lower on lingering doubts over the extent of OPEC cuts, with sentiment worsened by concerns over the economic health of the world's second-largest oil consumer, China, after it reported the steepest falls in overall exports since 2009.
Birol said although the OPEC agreement could signal higher oil prices, it would also encourage more production from the United States and elsewhere. Higher prices could also weaken global demand for oil, he added.
"I expect the U.S. shale oil will go back to increasing production this year," Birol said.
He added that a recent trend of declining Chinese oil production due to low prices could be reversed if the market strengthened.
Data from the U.S. Energy Information Administration showed crude production rose notably last week, particularly in 48 southern states. Overall production was 8.95 million barrels per day (bpd) last week, the most since April of last year.
OPEC and the independent producers are cutting supplies to remove a global glut and prop up prices, which at around $56 a barrel are half their level of mid-2014, hurting the revenue of exporting nations.
Birol said his main concern now was lack of investment in new oil supplies after low prices over the past two years forced the shutdown of many projects across the world.
"This year, if there are no major investments coming, we may well see in a few years time, significant supply-demand gap with serious implications on the market."
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