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

Today, 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 supply eased by 120,000 barrels per day to 97.8 million barrels per day in March, as OPEC and non-OPEC producers deepened their cuts to 2.4 million barrels per day. However, output was 1.4 million barrels per day higher than a year ago, largely due to higher production in the U.S.
• Due to the strong growth in U.S. production, IEA expects global supplies to rise by 1.8 million barrels per day in 2018 compared to 0.76 million barrels in 2017.  

OPEC supplies:

• According to IEA’s calculations, OPEC produced 31.83 million barrels per day in March, as production sharply declines in Venezuela.
• According to IEA, OPEC compliance to the production cut agreement has hit 163 percent.
• IEA expects OPEC production to rise to 32.5 million barrels per day in H2 2018.

Global demand:

• According to IEA, the global oil demand was 97.8 million barrels per day in 2017.
• IEA estimates demand growth for 2018 at 1.5 million barrels per day, which is same as the last forecast.
• OECD demand in 1Q18 was revised up by 315,000 barrels per day, partly due to cold weather in the US and the start-up of a petrochemical project.

Global inventories:

• On the inventory side, IEA report shows that OECD commercial stocks declined by 26 million barrels in February.
• OECD commercial stocks are currently at 2,841 million barrels, which is just 30 million barrels higher than the five-year average.
• Stocks declined 154 million barrels in 2017.
• IEA expects the stocks to drop to 5-year average by May.