Oil in Global Economy Series: Key highlights from IEA’s MOMR

The International Energy Agency released its monthly oil market report. The report suggests an easing oil market. Here are the key highlights,

Global supplies:

• Global oil supplies in September stands 100 million barrels per day thanks to increasing output in Saudi Arabia, the United States, and Russia.
• According to IEA, oil supplies are rising fast. Non-OPEC supply growth is expected at 2.2 million barrels per day in 2018, and 1.8 million barrels per day in 2019, led by the United States.
• Global supplies are higher than last year by 2.6 million barrels per day.  

OPEC supplies:

• According to IEA’s calculations, OPEC production reached 32.78 million barrels per day in September, as lower supplies from Iran and Venezuela got offset by rises in Iraq, Libya, and Saudi Arabiya.
• Since May, OPEC supplies have increased by 0.735 million barrels per day.

Global demand:

• IEA reduced its global oil demand growth forecast for 2018 to 1.3 million barrels per day and 1.4 million barrels per day for 2019.
• For lowering the forecast, it cited a weaker economic outlook, trade concerns, higher oil prices, and a revision to Chinese data.
• OECD demand will grow by 0.3 million barrels per day in 2018, led by the United States, whereas non-OPEC demand growth will be a million barrels per day led by China and India.

Global inventories:

• On the inventory side, IEA report shows that OECD commercial stocks rose by 15.7 million barrels in August.
• OECD commercial stocks are currently at 2,854 million barrels.
• In the third quarter of 2018, stocks rose by 43 million barrels per day, the biggest increase since the first quarter of 2016.

WTI is currently trading at $71.7 per barrel and Brent at $9.2 per barrel premium to WTI.