Published: Sat, May 20, 2017
Money | By Armando Alvarado

Global Oil Supplies Inch Down In April: IEA

Global oil markets are rebalancing as supply cuts by OPEC and its allies take effect, yet longer curbs are needed to drain excess inventories, according to the International Energy Agency. "Year-to-date compliance with production cuts remained robust at 96 percent", said the report. "There are no fast solutions to end this situation, and the only solution possible is to let oil prices work their way" to clear the oversupply, Al-Husseini said from the Saudi city of Dhahran.

Kuwait's Oil Minister Essam al-Marzouq said on Tuesday he supported a supply cut extension until the end of March 2018, echoing suggestions from top producers Saudi Arabia and Russian Federation on Monday, according to media reports.

"Rebalancing is here and, in the short term at least, is accelerating", said the Paris-based agency, which advises most of the world's major economies on energy policy.

Oil spikes as USA inventories tumble by more than expected
But after Brent prices fell back below $50 per barrel last week, analysts said producers felt forced to act. Saudi Aramco will reduce oil supplies to Asian customers by about 7 million barrels in June.

The EIA (U.S. Energy Information Administration) estimates that Iraq's crude oil production fell by 5,000 bpd (barrels per day) to 4.4 MMbpd (million barrels per day) in April 2017-compared to March 2017. "These combined volumes could largely offset the benefit of the extended cuts", Goldman Sachs said, keeping its average Brent price forecast for the third quarter at $57 per barrel. Thus, OPEC countries reduced the average daily production by nearly 1.2 million barrels.

Still, global oil supply and demand almost realigned in the first quarter after a almost three-year oversupply, and the oil stuck in storage tanks around the world shrank by 1 million barrels a day in March, the IEA said.

Still, stockpiles in some of the most developed economies - the 35 nations making up the Organization for Economic Cooperation and Development - increased in April, signaling that OPEC's work remains unfinished.

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