IEA reported the first since 2013, a serious decline in oil production

The total volume of world oil production decreased in may 2016 by 800 thousand barrels per day, by the end of may in the world daily it was produced by 95,4 million barrels of oil, of which 590 thousand barrels less than it was at the end of may 2015, the report of the International energy Agency (IEA). In the message, the IEA notes that the incident was the first significant decline in oil production since the beginning of 2013.

According to the IEA, production cut as OPEC countries and States outside the cartel, especially the United States and Canada, where the work oil prevent forest fires. By the end of 2016 oil production outside OPEC, according to IEA, will be reduced by 900 thousand barrels per day.

In Nigeria oil production fell to 30-year low because of the actions of the attackers on the fisheries of the rebels. In the result, the total volume of oil cartel fell by 110 thousand barrels (to 32.61 million barrels per day) to compensate for the loss even after the increase in production in the middle East and Iran.

Simultaneously raised the forecast average oil demand in 2016 to 96,07 million barrels per day, 100 thousand barrels more than previously expected and 1.3 million barrels higher than the previous year. In 2017, the rate of demand growth is expected to remain the same, and by the end of next year, global oil demand is expected to grow to 97.4 million barrels per day.

In the materials, the IEA emphasizes that, due to production cuts and rising demand, the oil market is gradually becoming more balanced. In the January forecast, the Agency predicted that in the first half of 2016, the volume of daily oil supply on the market will exceed demand by 1.5 million barrels. Now the amount of “extra” oil is reduced to 800 thousand barrels.

The reduction of the gap has led to a new increase in oil prices. According to the IEA, may 2016 was the third consecutive month of growth in oil prices, and in June the price of a barrel peaked 2016

At the same time, IEA experts emphasize that to speak about the imminent restoration of the balance too early, as large volumes of oil can return to the market after the victory over forest fires in Canada and insurgents in Nigeria and Libya. In addition, the market will continue to put pressure of oil accumulated in storage in the previous three years.

During today’s trading on the stock exchange ICE cost of a barrel of Brent crude oil fell below $50, dropping the minimum to $49,52 by 1.65% below the closing level of the previous trading session.