It doesn’t look like 2016 is going to the year the oil supply glut improves, according to the International Energy Agency. In a report released this week, the agency that helps inform global energy policy said the world could “drown” in oversupply if current factors remain unchanged.
What’s behind the worsening glut? On the supply side, Iran’s ramped up production following the end of economic sanctions offsets any slowdown from other oil-producing nations.
Demand conditions could also worsen as China’s economy struggles and a mild winter slows consumption.
The result of all of these factors is downward pressure on oil prices, which have already been sliding to lows not seen in more than a decade.
Here’s a look at the oil supply glut, by the numbers.
500,000 barrels = The daily output of oil the Iranian government aims to produce now that economic sanctions have been lifted under a landmark nuclear deal. In December, Iranian output rose by 40,000 barrels to its highest level since 2012.
600,000 barrels = The daily drop expected from non-OPEC oil-producing nations this year.
90,000 barrels = OPEC’s daily decrease in oil supplies in December (down to 32.28 million a day), mostly due to a slight drop in production in Iraq and Saudi Arabia. But production from OPEC is still 600,000 barrels a day more than the 31.7 million required in 2016.
1.2 million barrels = IEA’s expected daily consumption growth for oil in 2016, down from 1.7 million barrels a day in 2015.
1 million barrels = The daily rate at which supply will exceed demand in 2016, according to the IEA.
285 million barrels = The estimated additional amount of global inventories that could accumulate if these factors don’t change. According to IEA, on-land storage facilities could fill up, making it more profitable to stockpile excess crude at sea.
Under $27 a barrel = The price of U.S. crude as of Wednesday, according to AP. That’s the lowest price since May 2003.
$1.05 a barrel = The price one refinery was offering to pay last week for a high-sulfur grade of crude called North Dakota Sour, according to Bloomberg. High-sulfur crude is often priced lower than other varieties because specialized equipment is needed to process it. But the near-zero price of this crude still underscores the dire conditions of U.S. oil. When companies are willing to sell at that price, it tends to mean that they’ll be scaling back production.
7,000 = The jobs Chevron is planning to cut this year. BP has announced it will eliminate 4,000 jobs while Shell expects to cut 6,500 jobs. In 2015, the American energy sector shed a whopping 95,000 jobs — up from 14,000 the year before.
