The demand in global oil is rapidly slowing down than first thought, said by the International Energy Agency (IEA) in its latest market update. The surplus in global oil markets will last for longer persisting into late 2017 as demand growth drops and supply proves buoyant.
The global oil reserve will continue to increase through 2017, a fourth consecutive year of oversupply, and will continue to outpace demand until the first half of next year at the least. The market’s return to balance may take a while longer.
“For 2016, a gain of 1.3 million barrels a day (mb/d) is expected,” the IEA said in its September report published on Tuesday, corresponding to a decline of 100,000 barrels a day from its previous forecast.
The oversupply was aggravated by OPEC, a 14-member oil producing group which includes major producers from Middle East, to defend its market share in the face of rivals rather than the oil price. The action has put pressure on the corporation’s members while having the planned effect of putting rival non-OPEC producers out of action.
Oil extended losses after the report was published, Brent crude and West Texas Intermediate (WTI) are currently hovering around the $45-$47 mark with prices continue to fluctuate every time a piece of data signals whether oil demand could rise or fall and on how much of the oil glut remains.
Bayer’s $66bn procurement deal with Monsanto nearly done
German chemicals and healthcare giant Bayer is confident to announce the procurement of the largest U.S seed company Monsanto on Wednesday for more than $66 billion, sealing the biggest deal of the year.
The deal combines St. Louis-based Monsanto, known for its genetically modified crop seeds, and Bayer, the German manufacturer of a wide range of pesticides as well as aspirin.
Putting the two together, it creates an agricultural giant with a specialty in seeds and pesticides and estimated sales at $67 billion per year.
By accepting Bayer’s offer, the largest cash acquisition proposal on record, Monsanto is bound to give the German company a shot at grabbing the top spot in the fast-developing farm supplies industry.
The European Commission and U.S. Department of justice have been keeping a close eye on the negotiations and now that they’ve come to an agreement, the federal regulators will certainly take a close eye at any possible anti-trust issues that might arise from combining the largest companies in this agriculture business.