Recent supply and demand data from the International Energy Agency, IEA, has shown that global oil markets are heading towards a much anticipated equilibrium.
The IEA said in its latest oil market report that a rebalancing of supply and demand was beginning to become evident from the existing supply and demand data which showed that global oil supply was starting to look more measured. Demand was resilient and a surplus of oil could start to shrink later this year, it added.
“Global oil supplies rose 250,000 barrels a day in April to 96.2 million barrels a day (mb/d) as higher Organisation of Petroleum Exporting Countries, OPEC output more than offset deepening non-OPEC declines,” the IEA said in its monthly report.
It however noted that year-on-year, “world output grew by just 50,000 barrels a day in April versus gains of more than 3.5 million barrels a day a year ago” and noted that 2016 non-OPEC supply is forecast to drop by 800,000 barrels a day to 56.8 mb/d.
In spite of the higher output from the 12-country OPEC group, the IEA noted that falling non-OPEC supply and rising demand could cause oil stock growth to decline in the latter half of the year helping the supply and demand dynamic and crucially, oil prices to return to a more stable footing.
The IEA report is coming at a time the price of OPEC basket of fourteen crudes stood at between $43.19 a barrel and $43.22, according to OPEC Secretariat calculations