There’s finally some good news for the oil market

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We’re finally seeing a glimmer of good news for oil: global production has started to slow down.

In a recent note to clients, Credit Suisse’s Ed Westlake and Jan Stuart shared a few charts showing that global production ex-Saudi Arabia finally started slowing in 2015.

According to the data cited in their charts, global oil production has slowed to approximately 83 million barrels per day in 2016, from about 84 million in mid-2015.

“Production clearly is not ‘resilient’ anywhere for long,” they wrote.

However, we should note that the recent data from the US Energy Information Administration shows that total world production is up to 96.27 million barrels per day in 2016, up from 95.76 million bpd in 2015.

Looking under the hood, Credit Suisse’s team noted that US production (including crude and natural gas), European production (including crude and natural gas), and non-OPEC-non-US production have all started to turn.

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Data from the EIA shows that the US now produces about 8.60 million barrels of crude oil per day in 2016, down from 9.43 million barrels of oil per day in 2015.

At the same time, the Credit Suisse duo notes that they expect strong demand growth in 2016, although moderated from the pace in 2015.

“2015 was a good year for global oil demand growth. And despite a winter slowdown (driven by reduced diesel and heating oil consumption) we expect the trend of healthy growth to continue through 2016 — we see 1.5% versus 1.8% last year,” they argued.

Notably, West Texas Intermediate crude oil futures in New York touched a 2016 high of $42.25 on Tuesday after reports that Saudi Arabia and Russia had agreed to freeze production, and ahead of Sunday’s meeting between oil heavyweights in Doha, Qatar.

On Wednesday, Russia’s oil minister, Alexander Novak, confirmed he held production-freeze talks with Saudi Arabia’s oil minister, Ali al-Naimi.

“Now I do not want to comment prematurely on what will be discussed on April 17 in Doha. Let’s wait for the consultations,” Novak told the Russian news agency TASS. “The talks were held yesterday, this is a fact, but I will not announce the decision beforehand.”

As of 1:16 p.m. ET, WTI oil is at $41.88.

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