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UPDATE 1-IEA says global oil market now close to balance

Published 13/04/2017, 06:28 pm
© Reuters.  UPDATE 1-IEA says global oil market now close to balance

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LONDON, April 13 (Reuters) - The global oil market is close to balance, after nearly three years of excess supply, as production cuts by top exporters offset a longer-term decline in demand in the richest nations, the International Energy Agency said on Thursday.

The agency said oil stocks across the Organisation for Economic Cooperation and Development (OECD) fell by 17.2 million barrels in March, resulting in an increase of 38.5 million barrels, or 425,000 barrels per day (bpd), in the first three months of the year.

"The net result is that global stocks might have marginally increased in the first quarter, versus an implied draw of about 0.2 million barrels per day," the Paris-based IEA said.

"It can be argued confidently that the market is already very close to balance, and as more data becomes available this will become clearer. We have an interesting second half to come."

Overall, OECD crude stocks fell by 8.1 million barrels in February to 3.055 billion barrels, still 330 million barrels above the five-year average, the IEA said.

The IEA trimmed its forecast for global oil demand growth in 2017 by 40,000 bpd to 1.32 million bpd. It warned this could prove optimistic given slowing consumption in the United States and developed Asian economies such as Australia, Japan and South Korea.

On the supply front, the agency said global production fell by 755,000 bpd in March to 95.98 million bpd as OPEC and its partners complied with a joint deal to cut output by 1.8 million bpd in the first half of this year.

The Organization of the Petroleum Exporting Countries stuck to its pledge in March, bringing compliance to a "robust" 99 percent, the IEA said.

The agency said non-OPEC signatories, including Russia and Oman, raised their compliance rate to 64 percent, from 38 percent in February.

For 2017, the IEA said it expects non-OPEC supply to rise by 485,000 bpd, above its previous estimate of 400,000 bpd, led by increases in U.S. production growth.

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