Oil Prices Rise on Libya Supply Issues

IEA executive director Fatih Birol said, "The United States is set to put its stamp on global oil markets for the next five years".

"But as we've highlighted repeatedly, the weak global investment picture remains a source of concern - more investments will be needed to make up for declining oil fields".

The IEA, a bloc of 29 countries, advises its member states on industry trends, and the report's release comes at the start of the global oil conference known as CERAWeek.

More stringent policies to curb air pollution and the increasing use of electric transport are expected to slightly slow this demand growth.

Global oil demand is forecast to rise from 97.8 million barrels a day now to 104.7 million by 2023, with China remaining as the principal driver of growth. Without more investment outside the United States - and soon - keeping up with growing demand by 2023 could be hard. The result could be the thinnest margin of oil-production capacity over demand in more than a decade.

The IEA says rail shipments are expected to return to around the 170,000-barrel-a-day level in 2020 assuming Enbridge Inc. replaces its Line 3 pipeline and adds capacity elsewhere on its Mainline pipeline system.

The path is clear to get those additional barrels to world markets.

In 2017, Russian Federation hit a record oil output of almost 11 million barrels per day despite its participation in a production cut agreement between OPEC and non-OPEC states.

OPEC and other major producers agreed to cut combined output by about 1.8 million bpd to drain a global oil glut. Unless there is a change to the fundamentals, the effective global spare capacity cushion will fall to only 2.2% of demand by 2023, the lowest number since 2007. Discoveries of new oil resources fell to a record low in 2017, with less than four billion barrels of crude, condensate and natural gas liquids (NGLs) confirmed, the IEA said.

Oil 2018 also examines a variety of other topics including crude quality issues arising from the rapid increase in United States production, changing trade flows and a growing global refining capacity surplus.

The Organization of the Petroleum Exporting Countries (OPEC), along with some non-OPEC members led by Russian Federation, agreed in December to extend oil output cuts until the end of 2018. With seaborne oil traveling longer distances, energy security, one of the IEA's core missions, will remain as critical as ever.

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