Why Record-High Oil Stockpile Could Get Even Bigger

There is a record stockpile of oil worldwide, and a mild winter in Europe and the U.S. could push reserves even higher, while countries outside OPEC and the U.S. continue to boost output and add to supplies. The International Energy Agency said a "massive cushion has inflated" with a record 3 billion barrels in storage as "demand has been outpaced by vigorous production from OPEC and resilient non-OPEC supply," the agency said in its monthly report. While oil production in the U.S. has been dropping, non-OPEC output was strong in Asia, and Russia produced the most on record since the collapse of the Soviet Union. "Output outside of the U.S. continues to defy expectations, posting healthy gains in spite of lower prices and spending cuts," the IEA said, noting China, Vietnam, Oman and the North Sea. The IEA sees global demand slowing down to 1.2 million barrels a day next year vs. 1.8 million this year. "The current forecast is for a mild winter in Europe and the U.S. If it turns out to be true, bulging stock levels will add further pressure and oil market bears may choose not to hibernate," the IEA said. Analysts are also worried that the economic slowdown in China and Japan will curb demand...more