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OPEC cutting oil output although demand is set to rise

As winter is quickly approaching, the world is apparently moving towards another crisis in the energy department. The International Energy Agency (IEA) estimates that the global demand for oil is set to rise by 2.4 million barrels per day. That means that a hefty sum of extra energy that is going to be needed, and this is not even taking into account the possibility of a very cold winter, which would push demand even higher.

But while need for oil is expected to rise, OPEC countries have made a controversial decision to produce less. Fact is that they already had a lower output than usual before the announcement, but this additional cut is going to be especially problematic to handle, since non OPEC oil producers fell short of expectations this year as well.

All in all, non OPEC producers are expected to put out a whole 10 percent less than they did last year. Adding to this the 400,000 bpd missing from the OPEC, refiners will have to reach deep into their reserve stocks to satisfy consumer demand. With such a tight energy situation ahead, prices are set to rise higher again after the current cheap spell, and the lacking supply of oil is bound to remain a topic over the next few months for economics all over the world. Should the winter indeed get very cold in the strong consumer markets, keeping warm at night might be more expensive than expected.