IEA notes stable oil demand growth, high OPEC output compliance

PARIS, Global crude oil demand growth remains stable at 1.5 million barrels per day (mbpd) and should reach average demand of 99.3 mbpd for 2018, while agreed OPEC output restraints have reached 163 percent of target levels, the International Energy Agency (IEA) said Friday.

Current demand growth forecasts are unchanged from the IEA’s March report, although there has been a slight boost in OECD demand in the first quarter, yet this is to be offset by reductions in the last six months of 2018, the Paris-based agency noted.

In addition, non-OECD demand has weakened in China in the first three months, but has been also offset by stronger Indian oil needs.

In March, the IEA remarked that global oil output fell by 120,000 b/d to 97.8 mbpd, reflecting cuts in OPEC and non-OPEC production, which declined a combined 2.4 mbpd that month.

Nonetheless, the IEA remarked, global output levels are still 1.4 mbpd higher than a year ago, due to higher shale production in the US.

OPEC crude supply dropped 200,000 b/d to 31.83 mbpd in March, giving a compliance level of 163 percent with the Vienna restraint accords of 2016. Non-OPEC producers were also said to be 90 percent in compliance with the agreed commitments on output restraints.

The report also said that IEA calculations indicate a “call on OPEC crude” at 32.5 mbpd for the remainder of the year.

A spike in oil prices above USD 70/bbl was attributed to tighter markets and also to an increase in Middle East tensions but the IEA said its “overall view of global demand and supply growth in 2018 is unchanged from last month.” It also noted that the strong respect for output restraints by producers was having the greatest impact on stocks, which are now barely above five-year average levels.

Source: Kuwait News Agency