In its most recent World Oil Market Report, the IEA noted that the global oil market is set to move close to balance in the second half of this year. Regarding global oil demand, the IEA still expects 2016 global oil demand to grow by 1.2 mb/d. Interestingly, India is expected to replace China as the main engine of global demand growth. Specifically, revised data for late 2015 and early data for 2016 shows year-on-year growth of roughly 8%. For 2016 as a whole, India will see growth of around 300 kb/d - the strongest ever volume increase. On the supply side, the IEA continues to forecast a fall in non-OPEC supply in 2016 of 700 kb/d (bolstered by the slide in production of light, tight, oil in the U.S.). Further, within the group of non-OPEC producers, there appears to be only a few areas of growth with only a handful of countries likely to increase production this year. Regarding Iran, it looks like the countries return to the market is playing out at a more measured than some expected (Iranian oil production in March was ~400 kb/d higher than at the start of the year). Overall, the IEA notes that based on a conservative scenario for OPEC crude oil production of 32.8 mb/d in Q2/16 and 33.0 mb/d in both Q3 and Q4, the surplus of 1.5 mb/d built in H1/16 should fall to 0.2 mb/d in both Q3 and Q4. Based on the IEA's assumption, it looks like $50-$60 WTI by year-end could be a real possibility.
A Canadian Energy expert