Key highlights from IEA oil market report

Developed market energy watchdog, International Energy Agency (IEA) released its monthly oil market report today. Here are the key highlights –

• In second half of this year, oil market is moving closer to balance due to stronger than expected demand and unexpected supply disruption. IEA originally anticipated oil surplus of 1.5 million barrels/day in first half of the year but in actual, it now reports just 800,000 barrels/day. It said supply outside OPEC dropped 0.9 million barrels per day, larger than estimated along with supply disruptions in Nigeria and Canada have pushed market closer to balancing in second half of the year.

• Oil demand in the first quarter was revised up by 400,000 barrels to 1.6 million barrels/day. It revised its growth forecast to 1.3 million barrels/day, up 100,000 barrels from a previous estimate.

• OPEC production declined by 110,000 barrels/day in May, despite the fact that Iran’s output rose by 80,000 barrels to 3.64 million barrels per day and that is due to outages in Nigeria, Libya, and production halts in Venezuela. Total output from OPEC in May was 32.61 million barrels per day.

• However, IEA expects supply to increase next year outside OPEC. Main supply growth will be driven by Brazil, Canada. However, production from U.S. shale is expected to decline by 0.5 million barrels/day this year and 190,000 barrels/day in 2017.

This week, OPEC also released its monthly oil report, optimistic on market balance in the second half of the year.

Crude oil price has risen more than 90 percent since its bottom in February and currently trading at $49.6 per barrel.