Strict adherence with Opec supply cuts would shrink oil stocks in developed nations even though demand is expected to contract further.
Strict adherence with Opec supply cuts would shrink oil stocks in developed nations even though demand is expected to contract further, the International Energy Agency said on Friday in a monthly report. The implication is Opec does not need to lower output curbs again when it meets in Vienna on Sunday. The Paris-based IEA assessed the level of Opec compliance so far with supply restraints of 4.2 million barrels per day (bpd) agreed since last September at 80%, in line with estimates by other observers.
On the basis of the IEA"s current market assessment, full compliance would take Opec output 1.6 million bpd below 2009 demand for Opec output, the IEA said.
It estimated global oil supply in February at 83.9 million bpd, while Opec supply stood at 28 million bpd, down 1.1 million bpd from January.
In any case, Opec output would probably decline in March and April, the IEA said, citing production problems in Opec members Nigeria, where militants have disrupted supply, and Iraq, which has technical issues.
Non-Opec supply growth for 2009 was revised down by 380,000 bpd to zero, the IEA said, citing production problems in Azerbaijan.
Global oil demand will contract this year by 1.25 million bpd, the International Energy Agency said on Friday in another downward revision of prospects for fuel consumption.
The fall would take global demand down to 84.4 million bpd, the monthly report said.
In its previous report, the Paris-based agency had predicted demand would shrink by 980,000 bpd as a steep drop in economic growth eroded energy use.
At the same time, inventories have swollen and days of forward cover -- a measure closely watched by Opec -- have stretched to the equivalent of 58.7 days, much more than the 52 days the producer group considers comfortable.