In fact, production has surged, led by the USA shale revolution, and supported by big increases in Brazil, Canada and elsewhere, according to the IEA. In a new IEA study "The Future of Petrochemicals", the Agency points out that rising living standards, particularly in developing countries, are already underpinning strong demand growth for plastics and this will continue for many years to come.
Oil pared a weekly loss as investor focus shifted from broader market turmoil spurred by a plunge in US equities and returned to looming shortages from Iran's dwindling exports. United States crude was down 3.6 per cent on the week, while Brent crude fell 4.1 per cent.
Global demand outlook drags crude oil lower this week. As explained in the demand section of this Report, there is also an impact from methodological changes to Chinese estimates.
Such disclosures from a respected agency, combined with persistent signs throughout this week that the crude industry could compensate for losses of Iran exports without incurring undue tightening, seemed to baffle media that for the past few months had been predicting calamity due to the US sanctions against the Islamic republic.More news: Israel to demolish Palestinian home as punishment
"Since May, OPEC output has increased by 735,000 b/d, led by the main Gulf producers and supported by Nigeria and Libya, offsetting falls in Iran and Venezuela", said the report. At the same time, total U.S. supply has increased by 390 kb/d.
Supply from Iran during September dropped to a two-and-a-half year low, the IEA said, as customers continued to cut back in the run-up to new sanctions, which start on November 4.
The increase is the biggest weekly gain since mid-August.
Petroleum prices slumped to two-week lows on Thursday as global stock markets fell, as a report, showing US crude inventories rising more than expected, weighed on investor sentiment.
Yet as supply losses deepen in OPEC members Venezuela and Iran, the level of spare production capacity left elsewhere amounts to just 2 percent of global demand and will likely shrink further, it said. This, combined with a massive U.S. stock sell-off and growing concerns that trade disputes will adversely impact oil have weighed on oil prices this week.