[ad_1]
The price of oil has developed solidly in recent months and has returned to the level prior to the start of the corona pandemic. Thanks to the continued restrictions on production in the OPEC + alliance and the prospects for economic growth, North Sea oil has exceeded $ 70 a barrel on several occasions.
But in its recent oil market report on Wednesday, the International Energy Agency (IEA) warns against over-optimism:
– The strong rebound in oil near $ 70 per barrel has led to talk of a new supercycle and the threat of a supply deficit. Our data and analysis suggest otherwise, the agency writes.
– Enough to spare
Oil reserves were topped up when demand took a major hit during the pandemic last year. And even though they are gradually being drained, there is still “a lot” of oil there, the IEA notes.
In the short market analysis this month titled “Enough to Spare,” the agency writes that stocks in OECD countries are still at just over 3 billion barrels, 110 million barrels higher than it was ago. a year when the covid-19 crisis began. seriously. That equates to more than a month of global consumption.
In addition, there is a lot of unused production capacity that can be returned to the market. When OPEC +, led by Saudi Arabia and Russia, earlier this month decided to continue with most of the production restrictions that have supported oil prices since last year, it came as a surprise and helped drive prices even higher. . As of today, this group of producing countries holds eight million barrels per day, which is a significant volume compared to the world supply of 91.6 million barrels per day in February.
OPEC + will meet again on April 1 to negotiate the measures for the month of May.
Market in recovery
Despite warnings that oil price inflation is currently limited, the IEA continues to paint a picture of a stabilized market.
The agency expects oil demand to increase by 5.5 million barrels per day this year, slightly adjusted up from 5.4 million barrels in the previous report. This will cover roughly 60 percent of the demand that fell last year, leading to a total demand of 96.5 million more barrels per day for the year as a whole.
Most of the growth is still expected to occur in the second half of the year, with demand expected to increase by more than five million barrels per day from the first to fourth quarters as vaccine programs accelerate and the economy recovers.
– The outlook for stronger demand and continued ties in OPEC + production point to a sharp drop in oil inventories in the second half of the year. Yet so far there is more than enough oil in tanks and underground to keep global oil markets well supplied, the agency writes.
The IEA reiterates that it expects demand to return to pre-pandemic levels in 2023. (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content can only be done with written permission or as permitted by law. For more terms, see here.
