The surplus in the first half of this year is about 40 per cent smaller than estimated a month ago, as consumption proves stronger than expected while disruptions reduce supply, the Paris-based agency said.
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In its June report, OPEC attributed the recovery to a myriad of factors, including a weaker dollar, falling production in the U.S. and forecasts of a sharp fall in non-OPEC oil supply this year, partly owing to disruptions in some producer countries.
However, the overall non-OPEC oil supply for 2015 remained unchanged, averaging 57.14 million barrels per day compared to 55.67 million barrels per day in 2014, according to OPEC’s latest update to historical data.
The chronic glut of oil forced market prices to their lowest point in 12 years in January, but as the excess supply dwindles, prices have rallied higher.
In its Oil Market Report for June, released on Tuesday, the IEA revised global oil demand in the first quarter of this year up to 1.6 million barrels per day. The less-than-expected draw failed to give support to crude oil prices on Wednesday.
In London, Brent North Sea crude for delivery in August finished at $48.97 a barrel, down 86 cents from Tuesday s settlement.
Forecasts on oil supplies from non-members of the organization have not changed since 2015 when they amounted to 57.14 million barrels per day.
The agency said that outages in both OPEC and non-OPEC countries cut 800,000 barrels a day from global production in May, down by 590,000 barrels a day year over year. “The growth rate is slightly above the previous trend, mostly due to relatively low crude oil prices”, IEA’s Oil Market Report, published June 14 said.
Around 1145 GMT, Brent North Sea crude for delivery in August was down 44 cents at Dollars 50.10 a barrel.
Demand in the developed economies belonging to the Organization for Economic Cooperation and Development (OECD) is expected to be strongest in the Americas, flat in Europe and contracting in Asia.
In this Friday, May 13, 2016, photo, an overflow barrel holds oil near a storage tank on a South Texas ranch near Bigfoot, Texas.
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Attacks on Nigeria’s oil industry, wildfires in Canada and losses elsewhere pushed the level of unplanned supply outages to the highest in at least five years in May. “This is likely to dampen prospects of a significant increase in oil prices”, concluded the IEA. While U.S. shale oil production will start to recover by the middle of next year, average output for 2017 will be 190,000 barrels a day lower, after falling 500,000 a day in 2016.
