Latest commentaries from IEA

According to latest commentaries from International Energy Agency (IEA), global energy watchdog, oil market is moving closer to balancing, with demand holding steady and supply side rebalancing. IEA believes supply drop outside OPEC, especially in North America will lead to better supply/demand balancing in second half of 2016.

IEA expects supply outside OPEC to drop 700,000 barrels/day by end 2016. Global oil supply has dropped by 300,000 barrels/day in March to 96.1 million barrels/day. Due to higher outages in Nigeria, UAE and Iraq, OPEC supply dropped 90,000 barrels/day in March to 32.5 million barrels/day, despite increased production in Iran and Angola. Production in Iran increased by 400,000 barrels/day in March, compared to beginning of the year. Even then it is much more moderate than originally expected.

Demand is expected to rise 1.2 million barrels/day this year to end with                95.9 million barrels/day. India has been major source of demand growth.

Regarding the April 17th meeting in Doha, Qatar, where both OPEC and non-OPEC producers’ are expected to meet to decide on a production freeze, IEA said, without any production cut, impact on supply could be negligible.

Oil market is solely focused on the weekend meeting.                              

WTI is trading at $41/barrel and Brent at $2.5/barrel premium.