Oil market could tip out of balance on rising non-Opec production

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Add to that China's increasing stockpiling for internal use and demand for oil could slow more than expected.

Unless OPEC agrees to cut more production, output from non-member states will leave the market in surplus and limit the rally in oil prices, the IEA said.

To be sure, the IEA expects Canadian oil production to rise - to 6.2 million barrels per day by 2040 from 4.5 million bpd in 2016, 100,000 bpd more than the IEA's last report.

Oil-dependent Venezuela's crude output dipped last month below 2 million barrels per day, its lowest level in almost three decades, global producer group Opec said on Monday.

Some ministers for the Organization of Petroleum Exporting Countries said an extension of an agreement that sidelines about 2 percent of the total global demand for oil in an effort to balance the market was necessary next year.

IEA said it had cut its longer-term oil price projections from a year ago, partly because of the falling cost of both renewable and conventional sources of energy, the worldwide push to tackle climate change and improve air quality and the boom in United States shale oil and gas output.

In Abu Dhabi on Monday, the UAE Minister of Energy and Industry Suhail bin Mohammed Faraj Faris Al Mazrouei, said that oil producers were expected to unanimously extend a production cut accord later this month, but its duration was still under discussion. Scientists just this week said that emissions of the heat-trapping gas rose this year after three years of not growing. But analysts expect the price to not rise much further in coming months as the USA ramps up production.

"Prices ... are starting to look like a pause or pullback is needed", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.

"The reality is that even after some modest reductions to growth, non-OPEC production will follow this year's 700,000 bpd growth with 1.4 million bpd of additional production in 2018 and next year's demand growth will struggle to match this", it's monthly report read.

Global energy needs will rise more slowly than in the past but still expand by 30 per cent between today and 2040, the equivalent of adding another China and India.

The oil market should be able to find a longer-term equilibrium, with the oil price in the range of $50-70 a barrel, the agency said.

With big gains forecast in its output of shale oil, the United States is expected to become a net oil exporter by the mid-2020s, the IEA said, adding that the US will account for 80 per cent of the increase in the global oil supply to 2025, which will maintain near-term downward pressure on prices.

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