IEA notes “waning confidence” in oil market re-balancing

Investing.com - The IEA Thursday noted “waning confidence” by oil market participants in the re-balancing of supply and demand. The International Energy Agency noted net long positions have fallen to their lowest levels since January 2016.In its monthly report, the IEA also pointed to a “dramatic” recovery in oil output by Libya and Nigeria and a fall in OPEC compliance with output cuts.In its monthly report Wednesday, OPEC said output in June rose by 393,000 barrels per day.OPEC and non-OPEC producers have agreed to cut output by 1.8 million barrels per day through to March.“Our current view is that compliance slipped to 78% in June from 95% in May,” the IEA said.The Paris-based agency said low prices could cause U.S. shale producers to reconsider their levels of activity.It noted remarks by leading company executives saying that oil prices need to be around $50 to maintain production growth.The IEA said global demand growth rebounded to 1.5 million barrels per day in the second quarter.It said demand and supply implies a draw of 700,000 barrels per day in the second quarter.