IEA Sees Oil Supply Outside OPEC Falling by Most Since 1992

Production outside the Organization of Petroleum Exporting Countries will fall by 500,000 barrels a day to 57.7 million in 2016, the Paris-based adviser said Friday in its monthly report. While fuel demand this year will be the strongest since 2010, record-high oil inventories in developed nations won‘t start to diminish until the second half of next year, and the revival of Iranian exports with the removal of sanctions may swell supplies further, it said.

Shrinking supplies outside OPEC show that Saudi Arabia‘s strategy to defend the group‘s market share by pressuring rivals with lower prices „appears to be having the intended effect,“ the IEA said. Brent crude futures, a benchmark used around the world, slumped to a six-year low near $42 a barrel on Aug. 24. Production may not be falling fast enough to clear the global surplus and prices could drop as low as $20, according to Goldman Sachs Group Inc.