IEA says crude oil pro­duc­ers may strug­gle to de­ter­mine de­mand amid sec­ond wave

Business World - - World Business/ World Markets -

LON­DON — Global oil stocks which rose dur­ing the height of the pan­demic are be­ing steadily re­duced, the In­ter­na­tional En­ergy Agency (IEA) said on Wed­nes­day, but a sec­ond wave is slow­ing de­mand and will com­pli­cate ef­forts by pro­duc­ers to bal­ance the mar­ket.

OPEC+ pro­duc­ers — OPEC mem­bers and oth­ers in­clud­ing Rus­sia — plan to boost sup­ply by two mil­lion bar­rels per day (bpd) from Jan­uary and the IEA pre­dicts a cease­fire in Libya will raise out­put there to 700,000 bpd in December from 300,000 bpd cur­rently.

“There is only lim­ited head­room for the mar­ket to ab­sorb ex­tra sup­ply in the next few months,” the IEA said in its monthly re­port. “Those wish­ing to bring about a tighter oil mar­ket are look­ing at a mov­ing tar­get.”

OPEC+ pro­duc­ers are cur­rently cut­ting out­put by 7.7 mil­lion bpd.

The IEA said “the ef­forts of the pro­duc­ers have shown some suc­cess”, not­ing rel­a­tively sta­ble oil prices and a strong draw on stor­age, with im­plied global stocks fall­ing by 2.3 mil­lion bpd in the third quar­ter and by a pre­dicted 4.1 mil­lion bpd in the fourth.

How­ever, the agency added that a de­mand re­bound over the sum­mer was now slow­ing due to a sec­ond wave of coro­n­avirus cases and new move­ment re­stric­tions.

“This surely raises doubts about the ro­bust­ness of the an­tic­i­pated eco­nomic re­cov­ery and thus the prospects for oil de­mand growth,” the IEA said.

Global oil sup­ply fell in Septem­ber, the IEA said, as OPEC+ coun­tries im­proved their com­pli­ance with out­put cuts and aided by main­te­nance and out­ages which re­duced flows from Brazil, Canada and the North Sea.

The IEA said falls in oil stocks were es­pe­cially sharp in float­ing stor­age, which was down by 70 mil­lion bar­rels glob­ally to 139.1 mil­lion bar­rels in Septem­ber.

But the draw-downs were not uni­form, with stock in the US and Ja­pan down by 6.5 mil­lion and 1.8 mil­lion bar­rels re­spec­tively, but Euro­pean stor­age up by 3.3 mil­lion bar­rels. —

Newspapers in English

Newspapers from Philippines

© PressReader. All rights reserved.