Global oil supplies eased by 180,000 barrels per day (bpd) in February to 96.5mn bpd on lower OPEC and non-OPEC output, according to the new Oil Market Report (OMR) for March, released by the International Energy Agency (IEA).
But production stood at 1.8mn bpd above a year earlier, as a slight decline in non-OPEC was more than offset by OPEC gains.
Non-OPEC production in 2016 is estimated to fall by 750,000 bpd, to 57mn bpd; 100,000 bpd less than foreseen in last month’s report.
OPEC crude oil production eased by 90,000 bpd in February to a still-robust 32.61mn bpd with losses from Iraq, Nigeria and the UAE partly offset by a substantial rise in flows from post-sanctions Iran.
Saudi Arabia, OPEC’s largest producer, held supplies steady.
Sharp decelerations in demand growth — particularly in the United States and China — pulled global growth down to a one-year low of 1.2mn bpd in the fourth quarter of last year compared with the year earlier, dramatically below the near five-year high of 2.3mn bpd in the previous quarter.
A gain of around 1.2mn bpd is forecast for 2016.
The Organisation for Economic Co-operation and Development (OECD) commercial inventories gained 20.2mn barrels in January while forward demand cover remained comfortable at 32.7 days.
Preliminary data suggest that in February, OECD inventories drew for the first time in a year while volumes of crude held in floating storage increased.
Global refinery throughputs are estimated at 79.1mn bpd in the current quarter, reflecting weak OECD refinery throughput and a shift of peak spring maintenance to this quarter.
Annual growth in the fourth quarter of last year fell to below 1mn bpd amid product stock builds and in line with a slowdown in global oil demand growth.
The notion, which emerged last month amid discussions about freezing output led by Saudi Arabia and Russia, picked up steam from the IEA’s new market report.
After a 20-month rout that has shaved prices more than 60% since mid-2014, a tentative recovery is underway, it suggested.
‘International crude oil prices have recovered remarkably in recent weeks’, the IEA noted in report.
‘This should not, however, be taken as a definitive sign that the worst is necessarily over. Even so, there are signs that prices might have bottomed out’, the report read.
The IEA said the Saudi-Russian effort to gather producers behind an output freeze a ‘first stab at coordinated action that is intended to stabilise prices’ with the presumed aim of pushing oil up to $50 a barrel.
But the IEA predicted there was a long way to go before oil supply and demand find a real balance, probably in 2017.
In the United States, the Baker Hughes report on active drilling rigs in the country showed another decline, by six rigs, last week, pointing to a continuing fall in production.
