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

Yesterday, International Energy Agency released its monthly oil market report, which remains quite bearish. The report suggests an easing oil market. Here are the key highlights,

Global supplies:

• Global oil supply eased to 97.9 million barrels per day in February, however, it is still 0.7 million barrels per day higher compared to a year ago largely due to higher non-OPEC production.
• 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 32.1 million barrels per day in February, which is lower than January, due to losses in Venezuela and the United Arab Emirates.
• IEA expects OPEC production to rise to 32.6 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 higher compared to the last forecast of 1.4 million barrels per day and IEA admits that the increase was due to Strong early data.
• The early data based revision was 0.24 million barrels per day, however, switch to natural gas in Pakistan and Iraq's power sectors saw a downward revision of 0.15 million barrels per day.

Global inventories:

• On the inventory side, IEA report shows that OECD commercial stocks rose for the first time in seven months in January.
• OECD commercial stocks are currently at 2,871 million barrels, which is 53 million barrels higher than the five-year average.
• Stocks declined 154 million barrels in 2017.
• Cushing crude stocks reached their lowest level in three years.