Saudi Arabia may need to cut more, IEA says

Faced with higher output from Libya, Nigeria and Iran, bigger production cuts from Saudi Arabia will be necessary in order for OPEC to meet its informal target of capping their crude oil supplies at between 32.5m to 33.0m barrels a day, the rich world's energy watchdog said according to reports.

In its monthly oil market report for October, the International Energy Agency also said global oil supplies had risen by 0.6m barrels per day during in September, and by 0.2m b/d versus last year, to reach 97.2m b/d.

Higher production from Russia and Kazhakstan had led to a 0.5m b/d jump in non-OPEC supplies, even as OPEC's own supply hit an all-time high of 33.64m b/d after a rise of 160,000 versus the prior month.

Iraq pumped at its highest level ever and Libya reopened its ports in September.

Bulging inventories worldwide were a problem too and might possibly extend the glut of supplies through the first half of 2017, the IEA said.

However, should OPEC stick to its agreement then that adjustment might come about more quickly, the Paris-based organisation said.

OECD commercial crude oil stockpiles fell in August for only the first time since March, by 10 mb to 3,092 mb, and in September only declined in Japan and the US.

Growth in demand for oil slowed in the third quarter of 2016 to a four-year low as a result of "vanishing OECD growth" and a "marked" deceleration in China, according to the IEA.

"The potential for colder weather should see growth rebound somewhat in 4Q16."

Global oil demand was projected to expand 1.2m b/d in 2016 and by a similar amount in 2017.

Nevertheless, in a separate report published on 10 October the IEA highlighted the progress made by governments in reducing their respective economies' so-called 'energy intensity'.

Energy intensity — the amount of energy used per unit of gross domestic product — improved by 1.8% percent in 2015, accelerating from the 1.5% seen in 2014, which in turn was triple the average rate seen over the past decade.

As of 1412 BST, front month Brent crude futures were down by 0.245% to $53.01 in ICE trading.