(task) IEA Changes View on Oil Glut, Sees Surplus Enduring in 2017 - Bloomberg

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> http://www.bloomberg.com/news/articles/2016-09-13/iea-changes-view-on-oil-glut-sees-oversupply-persisting-in-2017 <http://www.bloomberg.com/news/articles/2016-09-13/iea-changes-view-on-oil-glut-sees-oversupply-persisting-in-2017>
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> IEA Changes View on Oil Glut, Sees Surplus Enduring in 2017
> <http://www.bloomberg.com/news/articles/2016-09-13/authors/AOUaa2Db_Co/grant-smith>September 13, 2016 — 4:00 AM EDTUpdated on September 13, 2016 — 6:47 AM EDT
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> IEA Sees Oil Oversupply Extending Into Next Year
> Faltering Asian demand has weighed on consumption this quarter
> Market set for fourth year of surplus as Gulf OPEC pumps more
> The surplus in global oil markets will last for longer than previously thought, persisting into late 2017 as demand growth slumps and supply proves resilient, the International Energy Agency said.
> World oil stockpiles will continue to accumulate through 2017, a fourth consecutive year of oversupply, according to the IEA. Consumption growth sagged to a two-year low in the third quarter as demand faltered in China and India, while record output from OPEC’s Gulf members is compounding the glut, it said. Just last month the agency predicted the market would return to equilibrium this year.
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> “Supply will continue to outpace demand at least through the first half of next year,” the Paris-based adviser said in its monthly report. “As for the market’s return to balance -- it looks like we may have to wait a while longer.”
> Oil extended losses after the report was published, with West Texas Intermediate crude falling as much as $1.25, or 2.7 percent, to $45.04 a barrel.
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> Almost two years after the Organization of Petroleum Exporting Countries set a strategy to eliminate the global oil glut by pressuring rivals with lower prices, markets continue to struggle with excess supply and crude remains capped below $50 a barrel. The organization plans to hold informal talks with competitor Russia in Algiers later this month, fanning speculation that producers may agree on an output cap to shore up prices.
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> To read about possible outcomes of the Algiers talks, click here. <http://www.bloomberg.com/news/articles/2016-09-08/four-scenarios-for-oil-producers-as-they-seek-to-boost-prices>
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> “This a marked shift in outlook by the IEA, which not too long ago was contemplating a re-balancing of the market in 2016,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. OPEC’s “long game got a little longer, implying the need for oil prices to remain lower for longer to spur the necessary adjustments in supply.”
> The IEA trimmed projections for global oil demand next year by 200,000 barrels a day to 97.3 million a day. It reduced growth estimates for this year by 100,000 barrels a day to 1.3 million a day, citing a “dramatic deceleration in China and India” this quarter coupled with “vanishing growth” in developed economies.
> “Recent pillars of demand growth -- China and India -- are wobbling,” said the IEA, which counsels 29 nations on energy policy. “The stimulus from cheaper fuel is fading. Refiners are clearly losing their appetite for more crude oil.”
> Trapped OPEC
> Supplies outside OPEC will rebound next year after this year’s sharp decline, rising by 380,000 barrels a day, according to the report. The estimate is “marginally” higher than last month, driven by the stronger-than-expected performance of Norway and Russia. U.S. shale-oil production will begin to recover in the second half of 2017, it said.
> “OPEC is trapped,” said Olivier Jakob, managing director of consultants Petromatrix GmbH in Zug, Switzerland. “Non-OPEC supply has been able to adjust better than expected to the lower oil prices.”
> Production from OPEC’s 14 members rose slightly last month as Gulf countries Saudi Arabia, Kuwait and the United Arab Emirates pumped at or near record levels and as Iraq pushed output higher, the IEA said. Saudi Arabia has overtaken the U.S. as the world’s largest oil producer -- when non-crude forms like natural-gas liquids are included -- a ranking America held since April 2014.
> The combination of faltering demand and increased OPEC output pushed oil inventories in developed nations to a record in July, at 3.1 billion barrels.
> “Demand growth is slowing and supply is rising,” the agency said. “Consequently, stocks of oil in OECD countries are swelling to levels never seen before.”
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> The Crazy, Mixed-Up Global Oil Market
> Algerian oil finds an unlikely home far away in Australia when cheap shipping redraws long established trade routes
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> IEA's Parry: China, Europe, India Lead Oil Demand Decline
> From Norway to the Bahamas, from Algeria to Australia.
> Ultra-lowcrude prices <http://www.bloomberg.com/energy>combined with cheap shipping rates are encouraging a host of exotic new oil trading routes that wouldn't look out of place in the latest travel brochures.
>
> Oil exporters are tapping into new markets as they attempt to work through a glut in crude supplies that’s reshaping oil market economics and redrawing decades-old shipping routes.
> The U.S. has led the way thanks to the lifting of a 40-year ban on oil exports, withshipments departing for <https://www.eia.gov/dnav/pet/pet_move_expc_a_EP00_EEX_mbbl_m.htm>Curacao, France, and Israel in recent months.
> But the trend has extended even away from the States, with more traditional oil-producing nations experimenting with increasingly unusual destinations as they battle to grab market share following crude's price collapse.
> Encouraging such new routes is the fact that oil remains in contango–meaning near-term deliveries are cheaper than those further out in the future. Combined with cheap freight costs, the trend means oil exporters can just as well afford to ship their product to far-flung places for refining than keep it on floating oil tankers for delivery at a later date.
> The growing list of new trade routes could be a boon for oil refiners who are able to source crude from an expanding array of colorful destinations. It could also prove lucrative for oil traders including BP Plc, Trafigura Group Pte and Vitol Group BV as they arbitrage the difference in oil prices between various locations–potentially pocketing hefty profits as they do so.
> Last year, Saudi Arabia began shipping oil to Poland in a fight with Russia for a share of the European market. The United Arab Emirates started exporting oil to Romania, while Oman sent crude to the U.S. for the first time in three years–an example of refiners rejecting relativelyhigher U.S. oil prices in favor of cheaper imports from other regions.
> “These flows have only been made possible due to two strongly reinforcing trends: extremely low freight rates and accommodative inter-regional crude spreads,” analysts at JBC Energy GmbH wrote in a note published last week. “These are simple economic calculations that have significantly widened refiners’ crude procurement options.”
> The analysts cite the examples of Algeria sending cargoes of Saharan Blend as far as Indonesia, Cuba and Australia. Crude shipments emanating from the North Sea are due to be exported to South Africa, they said, while previous cargoes have headed for the U.S. Atlantic Coast as well as the Bahamas.
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> LinkedIn’s Hoffman Offers $5 Million for Trump’s Tax Returns
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> Reid Hoffman.Photographer: Noah Berger/Bloomberg
> He’ll quintuple money raised by Marine for veterans groups
> Trump must release tax returns by Oct. 19 to trigger giving
> LinkedIn co-founder Reid Hoffman is the latest Silicon Valley heavyweight to get his money involved in politics. He’s offering to donate as much as $5 million to veterans if Republican nominee Donald Trump releases his tax returns in time for the final presidential debate.
> Hoffman, who is chairman of LinkedIn Corp. and a partner at venture capital firm Greylock Partners, saw a crowdfunding challenge by a 26-year-old Marine Corps veteran, Pete Kiernan, who said he would donate any of the money raised to nonprofits that assist veterans if Trump releases his returns by Oct. 19, the date of the final debate. If Kiernan meets or beats his $25,000 target, Hoffman will match the total amount by five times, up to $5 million, he said in apost <https://medium.com/@reidhoffman/a-26-year-old-marine-corps-vet-has-a-plan-to-liberate-trumps-tax-returns-4a682da7787d#.mestmwi8x>on Medium.
> “There’s no real reason that Trump is keeping his returns secret, except that he sees them as a bargaining chip to utilize,” Hoffman wrote. “As Trump skirts his obligation to the American people, we must show him that we do value accountability and transparency.”
> Hoffman didn’t say which candidate he supports, but appealed to Trump’s claims as a supporter of veterans. His pledge comes a few days after Facebook Inc. co-founder Dustin Moskovitz said he would commit $20 million to helping Democrats in the election, including presidential nominee Hillary Clinton. Moskovitz said it was his first open endorsement and donation to a candidate for president.
> “We hope these efforts make it a little more likely that Secretary Clinton is able to pursue the agenda she’s outlined, and serve as a signal to the Republican Party that by running this kind of campaign -- one built on fear and hostility -- and supporting this kind of candidate, they compel people to act in response,” Moskovitz said, also in apost on Medium <https://medium.com/@moskov/compelled-to-act-1413930041ee#.gn4aim7os>.
> In July, more than 100 technology leaders signed a letter naming Trump a “disaster for innovation.” Twitter Inc. co-founder Ev Williams, Box Inc. Chief Executive Officer Aaron Levie and venture capitalist Vinod Khosla were among those endorsing the letter, which said Trump’s views on immigration, internet security and government investment would stifle the technology industry and divide the nation. Facebook board member Peter Thiel is one of the few Silicon Valley leaders to have publicly supported Trump so far.
> Facebook Chief Operating Officer Sheryl Sandberg and Tesla and SpaceX co-founder Elon Musk are also among supporters of Clinton in Silicon Valley. In his post, Moskovitz hinted that others may become vocal. “We are not the only ones being activated so strongly during this election.”
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