• 4 minutes Drone attacks cause fire at two Saudi Aramco facilities, blaze now under control
  • 7 minutes China Faces Economic Collapse
  • 13 minutes Oil Production Growth In U.S. Grinds To A Halt
  • 15 minutes Iran in the world market
  • 18 minutes Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 3 hours One of the fire satellite pictures showed what look like the fire hit outside the main oil complex. Like it hit storage or pipeline facility. Not big deal.
  • 10 mins Never Bring A Rapier To A Gun Fight
  • 1 hour Trump Will Win In 2020 And Beyond..?
  • 43 mins Bahrain - U.S.: Signed Deal To Buy Patriot Missiles
  • 17 hours USAvChina.com
  • 26 mins USA Wants Iran War -- Shooty Shooty More
  • 8 hours Lest We Forget... A Brief Timeline of China's Modern History
  • 20 mins Democrats and Gun Views
  • 4 hours Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 12 hours Visualizing US Oil & Gas Production (Through May 2019)
  • 2 hours How OPEC and OECD play their role in setting oil price in light of Iranian oil sanction ?? Does the world agree with Iran's oil sanctions ???
Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

IEA Claims The OPEC Deal Is Working

OPEC’s relentless output increase before their November deal to curtail supply has led to the first global stocks increase in six months, the International Energy Agency (IEA) said on Wednesday, noting that the market needs time to see a significant drawdown, expecting an implied deficit of 500,000 bpd for the first half at current production levels and supply and demand fundamentals.

According to IEA data, total OECD oil stock levels confirm the legacy of higher production at the end of last year. Global inventories had started falling in August from record high levels, and by end-December they had dropped by 120 million barrels, an average decline of almost 800,000 bpd, IEA said.

“However, in January we saw an abrupt about turn with OECD stocks increasing by 48 mb (1.5 mb/d) and preliminary data for February suggests they have fallen back again only modestly,” the agency noted.

Export volumes are still in storage around the world, and U.S. stocks are building, the IEA said. In the U.S., supply is currently building in three ways: imports are rising (and so are exports), domestic output is growing, and refinery utilization is dropping.

The global market has yet to digest “a vast amount of past supply, which will take time to work its way through the system”, the IEA noted.

At the same time, the demand growth outlook for 2017 remains unchanged at a healthy 1.4 million bpd, following three previous upgrades in IEA estimates. Related: Why Last Week’s Oil Price Crash Was Inevitable

Beyond concerns over yet-to-be absorbed production and rising non-OPEC output, the IEA sees – again – a solid start to OPEC’s compliance to the cuts. After noting last month that OPEC’s supply-cut deal achieved a record initial compliance rate of 90 percent, the IEA said today that compliance for January and February averaged 98 percent, as Saudi Arabia – with an estimated 135-percent rate – is the main factor behind the high compliance rate of the group.

Among the 11 non-OPEC producers that had joined the deal, compliance was 37 percent, dragged low in large part by Russia’s sluggish cuts.

The takeaways from today’s report could be the two last sentences in it:

“For those looking for a re-balancing of the oil market, the message is that they should be patient, and hold their nerve. In the meantime, the volatility that suddenly broke out last week will probably recur, as the IEA has regularly warned.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play