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World oil supply falls by nearly 600,000 barrels a day

The dip was mainly from non-Opec production, and in July it had fallen to 96.6m b/d

World oil supply fell nearly 600,000 barrels a day (b/d) in July to 96.6m b/d mainly on lower non-Opec production. Despite the monthly fall, total output towered 2.7m b/d above a year earlier, of which Opec crude and natural gas liquids made up nearly 60%.

Opec oil supply held steady near a record three-year high in July at 31.79m b/d. Saudi output eased from an all-time high, offsetting another record-smashing month from Iraq and the UAE and slightly higher Iranian production. Total Opec production stood 1.3m b/d above a year ago.

The IEA said a stronger demand outlook and slower non-Opec growth have raised the ‘call on Opec crude and stock change’ for 2016 to 30.8m b/d, up 1.4m b/d year-on-year and a 600,000 b/d revision to the IEA’s previous report. The ‘call’ in the fourth quarter this year is expected to rise 650,000 b/d to 30.6m b/d from the third quarter.

As lower prices and reduced investment take their toll, non-Opec supply growth is forecast to decelerate sharply through the end of the year and drop in 2016 – with US growth hit hardest. Non-Opec output is predicted to add 1.1 million b/d, to average 58.1m b/d in 2015 and contract next year by 200,000 b/d to 57.9m b/d. That compares with record growth of 2.4m b/d in 2014.

Non-Opec output fell by almost 600,000 b/d in July to 58.1m b/d, thanks to slowing US supply and seasonal North Sea maintenance. Total supplies were nevertheless nearly 1.2m b/d above a year ago, with the Americas making up most of the growth.

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