The IEA said that although the Indian epidemic hit demand again, the oversupply caused by the global epidemic has been eliminated.
The IEA said on Wednesday that the excess oil stocks in developed countries are only a fraction of what they had when demand plummeted last year, and that OPEC and its allies' production cuts have depleted the excess oil stocks. However, the agency believes global consumption will suffer temporarily as the new crown ravages India until it recovers later this year.
"The excessive world oil inventories accumulated during last year's covid-19 demand shock have returned to more normal levels," the IEA said in its monthly report. But the covid crisis in India reminds us that the outlook for oil demand is still full of uncertainty. Market volatility is likely to continue until the epidemic is brought under control. "With the recovery of fuel consumption in China and the United States, the recovery momentum of the oil market continued this year, pushing the international crude oil price in London to about $69 a barrel.
In March, developed countries' oil inventories were only 36.9 million barrels higher than the 2015-2019 average, lower than the surplus of about 250 million barrels last summer, according to the IEA. Compared with the 2016-2020 average, the excess crude oil is only 1.7 million barrels, less than the capacity of a supertanker.
Demand is suffering a temporary setback, and India's oil consumption is expected to decrease by 630000 barrels a day in the second quarter due to the spread of the epidemic in India. The estimated global oil demand in 2021 decreased by 270000 B / D to 96.4 million B / d. The Paris based IEA provides advisory services to most major economies.
"The outlook for demand is still fragile," Toril bosoni, head of IEA's oil markets and industry division, told Reuters television. However, the agency "expects a strong recovery in demand growth in the second half of this year."After an unprecedented slump in 2020, global oil consumption is expected to rebound by 5.4 million B / D, or 6%. The recovery will intensify in the second half of the year, leading to a further reduction in inventories.
This will give the 23 nation OPEC + alliance, led by Saudi Arabia and Russia, a choice: either further resume suspended oil production or continue to tighten global markets.
OPEC and its partners are resuming production of about 2 million barrels a day in three months. The IEA data show that when the production increase is completed in July, the demand for OPEC crude oil will still be higher than the production.
According to the IEA report, OPEC's 13 member countries produced about 25 million barrels a day last month, while supply and demand are expected to be 28.1 million barrels in the third quarter.