Oil prices are expected to remain steady as the market rebalances in 2018

Courtney Goldsmith
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Compliance with Opec cuts was 86 per cent in the year to date (Source: Getty)

The global crude market will rebalance next year if the Organisation of the Petroleum Exporting Countries (Opec) holds output at current levels - but oil prices are not expected to rise in 2018, a new forecast has suggested.

A monthly oil report by the International Energy Agency (IEA) predicted global demand will grow by 1.6m barrels per day (bpd) in 2017 and 1.4m bpd in 2018.

Global oil supply rose by 90,000 bpd in September to 97.5m bpd due to higher production from non-Opec countries. Opec output remained "virtually unchanged" last month, and the IEA said compliance with its supply cuts for the year to date was 86 per cent.

Read more: Oil prices edge up as Opec confirms the market is rebalancing

(Source: IEA)

Output is 620,000 bpd higher than it was last year, and non-Opec supplies are expected to grow by 700,000 bpd this year, followed by a 1.5m bpd increase in 2018.

"Taking 2018 as a whole, oil demand and non-Opec production will grow by roughly the same volume and it is this current outlook that might act as the ceiling for aspirations of higher oil prices," the agency said.

The Organisation for Economic Co-operation and Development's (OECD) commercial stocks fell 14.2m barrels in August to just over 3bn barrels, leaving the surplus 170m barrels over the five-year average, down from 318m barrels at the end of January.

"The next few weeks ahead of the producers' meeting in Vienna on 30 November will be crucial in shaping their decision on output. A lot has been achieved towards stabilising the market, but to build on this success in 2018 will require continued discipline," the IEA said.

Read more: Opec forecasts higher demand in 2018 as the market moves closer to deficit

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