Global oil surplus is beginning to shrink due to stronger-than-expected European and U.S. demand growth, as well as production declines in OPEC and non-OPEC countries. That's according to the International Energy Agency (IEA) on Wednesday.

 

The agency, which coordinates energy policies of industrial nations, raised its 2017 global oil demand growth estimate to 1.6 million barrels per day from 1.5 million. Global demand has gone up 2.3 million barrels per day in the second quarter, the highest quarterly year-on-year rise since mid-2015. Analysts attribute the growth to robust demand in industrialized countries. On the supply side, global oil output fell by 0.72 million barrels per day in August due to unplanned outages and scheduled maintenance in Russia, Kazakhstan, Azerbaijan and Mexico. As a result of output declines and stronger demand, global oil stocks are beginning to rebalance.