LONDON: Opec and its allies appear to have accomplished their mission of bringing global oil stocks to desired levels, the International Energy Agency said on Friday, signalling that the markets could become too tight if supply remains restrained.
The IEA, which coordinates the energy policies of industrialised nations, said global stocks in developed countries could fall to their five-year average — a metric used by Opec to measure the success of output cuts — as early as May.
“It is not for us to declare on behalf of the Vienna agreement countries that it is ‘mission accomplished’, but if our outlook is accurate, it certainly looks very much like it,” the IEA said in its monthly report.
Vienna-based Opec has reduced production in tandem with Russia and other allies since January 2017 to prop up global oil prices, which soared above $70 per barrel this month, giving a new boost to booming US shale oil output.
But as oil production collapsed in Opec member Venezuela and still faces hiccups in countries such as Libya and Angola, the oil exporter group is producing below its targets, meaning the world needs to use stocks to meet rising demand.
On Thursday, the Opec said in its monthly report that oil stocks in the developed world were only 43 million barrels above the latest five-year average. The Paris-based IEA put the figure at just 30 million barrels as of the end of February. — Reuters
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