IEA oil market report shows oil price increase post OPEC talks

Petrol inlet 2010 ubtOil prices rise significantly from the beginning of 2016. (Image source: Tomasz Sienicki/Commons)The International Energy Agency (IEA) December 2016 report shows the difference from January 2016 when the cost of oil was at US$30 per barrel to today's >US$50 barrel and the ever-changing oil market 

In the IEA report highlights, there has been a big emphasis on the OPEC talks and production cuts, and the global production cut backs in order to bring the oil price up. As the report states, 'OPEC has agreed to cut output by 1.2mn bpd from January 2017 and secured a reduction of 558,000 bpd from non-OPEC.' 

The reduction has been secured by OPEC talks in Vienna in November and December this year. The additional cuts were led by Russia and are expected to curb 2017 growth from non OPEC producers to 0.2mn bpd from the IEA's previous estimate of 0.5mn bdp. 

Despite this, the global oil supplies in November were at a record high, 98.2 mn bpd, as OPEC production cancelled out the drop in non-OPEC output. In addition, global oil demand has grown to 1.4mn bpd, 120,000 bpd above the IEAs original forecast, with strong US numbers and changes to China's demand being the key to oil demand growth. 

The main story has been the addition of US$10 per barrel following the cut of production by OPEC and non-OPEC. This saw the loses that hit the oil markets in November to be reversed in December. 

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