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Global observed oil inventories fell in October, with the first drop in oil product stocks for the first time in four months, the International Energy Agency (IEA) said on Thursday.
Global observed oil inventories dropped by 19.6 million barrels in October, with crude inventories largely unchanged, but with the first decline in refined petroleum stocks in four months. The falling product stocks in October reversed the trend from the third quarter when oil product stocks rose by 1.3 million barrels per day (bpd), while crude drew 1.6 million bpd on average, the IEA said.
The latest OPEC+ cuts announced for the first quarter of 2024 are aimed at preventing a potential inventory build, the agency said. But it also noted that soaring supply from non-OPEC+ producers – led by the United States – and slowing global demand growth this quarter could make OPEC+’s task to support prices more difficult.
“The continued rise in output and slowing demand growth will complicate efforts by key producers to defend their market share and maintain elevated oil prices,” the IEA said in its Monthly Oil Market Report today.
“Improved drilling efficiencies and well productivity in the shale patch saw US oil supply exceed 20 mb/d in September, defying industry warnings of an imminent slowdown in growth due to cost inflation and oil field service capacity constraints,” the agency noted.
As a result, the IEA has now revised up its projections for U.S. supply in the second half of 2023 by nearly 600,000 bpd since its June report.
The United States is now on track to deliver a supply increase of 1.4 million bpd in 2023, accounting for two-thirds of the 2.2 million bpd non-OPEC+ production growth. At the same time, OPEC+ will post a 400,000 bpd decline in output and its market share will drop to 51% in 2023 – the lowest since the OPEC+ group’s creation in 2016, the IEA said.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.