Developed economies’ oil market watchdog International Energy Agency (IEA) released its monthly oil market report today and here are the key highlights,
- The global oil market is very close to coming into balance, however, weaker demand growth and the strong US production pose challenges to OPEC’s attempt to cut supplies.
- It expects the global oil stocks to decline if OPEC maintains its production cuts along with other non-OPEC participating countries including Russia. However, despite supplies remaining tight throughout the year, productions from non-OPEC countries other than the US will soon be rising.
- Though demand was weaker than expected, oil inventories have declined in February and in March. OECD stock declined by 8.1 million barrels in February but it is still above the five-year average by 330 million barrels. The total stocks stand at 3.055 billion barrels. Preliminary data shows, stocks declined by 17.2 million barrels in March but the net first quarter stocks are still up by 38.5 million barrels.
- It lowered its demand growth forecast by 40,000 barrels to 1.32 million barrels per day. Total demand is expected to get reached 97.9 million barrels per day in 2017.
- It forecasts that supply outside OPEC would increase 485,000 barrels per day in 2017 while the US production would rise by 680,000 barrels per day by the end of the year compared to 2016.
- OPEC remains in full compliance with the agreed deal. In March, OPEC production declined by 365,000 barrels per day to 31.68 million barrels per day.
- Global crude oil supplies declined by 755,000 barrels in March to 95.98 million barrels per day.
WTI crude is currently trading at $53.1 per barrel and Brent at $2.7 per barrel premium to WTI.
