IEA: Oil Glut Worsens As OPEC Market-Share Battle Just Beginning
Glut In Refined Products
The IEA left its 2015 oil demand growth forecast broadly unchanged from last month at 1.1 million bpd, to 93.6 million bpd, up from 0.7 million in 2014.
It said an improving economic outlook for Europe was offset by reduced expectations for oil demand growth in the former Soviet Union, the Middle East and Latin America.
In another bearish sign for oil prices, U.S. product stocks built counter-seasonally in March, and China posted record-high distillate builds, the IEA said.
"Preliminary data show OECD-wide product stocks stopped drawing and swung into growth in April. More such builds may follow as global demand goes through a seasonal soft patch and refining activity increases worldwide," it said.
Adding to the bearishness, the IEA said it saw little sign of OPEC curtailing its output in the next month, saying early soundings suggested the producer group will sustain rates at around 31 million bpd during May.
"Bucking the global trend, Kuwait, Saudi Arabia and the UAE are all raising their rig count and expanding their drilling programs. Iraq and Libya, meanwhile, continue to raise production against all odds. And Iranian supplies hit their highest since July 2012," it said.
April marked the 12th consecutive month in which OPEC production ran above the group's self-imposed 30 million bpd supply target and was up nearly 1.4 million on the year before as top exporter Saudi Arabia held flows above 10 million.
The IEA said it cut its call on OPEC crude by 0.3 million bpd to 30 million bpd for the second half of 2015 due to upward revisions to non-OPEC supply growth.
(Writing by Dmitry Zhdannikov; Editing by Dale Hudson)
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