In its most recent report, the IEA noted that rising demand and supply disruptions are bringing the oil market back into balance. Specifically, the IEA has revised its H1/16 global oil surplus to 800,000 b/d, 40% less than its previous estimate. Regarding its 2017 outlook, the IEA expects global oil demand to increase by 1.3 million barrels a day to reach 97.4 million barrels a day (same rate of increase as in 2016). Further, non-OPEC production is expected to grow at a modest 200,000 barrels a day, with gains limited to Canada and Brazil. Average output for US shale is expected to be 190,000 barrels a day lower next year, after falling 500,000 a day in 2016. In total, global inventories are expected to decline by 100,000 barrels a day through 2017. Overall, the IEA's predictions point to a market re-balancing in H2/16, as a drop in inventories in Q3/16 counters another increase in Q4/16. That said, the rebalancing of the market could be delayed if halted supplies in Canada, Nigeria and Libya are able to restart. The IEA's relatively bullish outlook suggests that there is finally a light at the end of the tunnel and oil prices will likely continue their upward trajectory.
A Canadian Energy expert