Oil inventories in developed nations are just 30 million barrels above their five-year average, the measure that OPEC is using to gauge whether markets are balanced.
The International Energy Agency declared that OPEC is on the verge of “mission accomplished” in its investigation to clear the global oil glut that caused the worst industry downturn in a generation.
The agency said, less than 10 percent of the surplus in oil inventories remains, as OPEC and its partners have cuts the production. As Venezuela’s economy hits its oil production, unplanned losses among the support exceeds the cut pledged by OPEC’s biggest member, Saudi Arabia.
Since the start of last year, the Organization of Petroleum Exporting Countries and Russia have been spearheading an effort by oil producers to offset the surplus unleashed by U.S. shale drillers. Oil futures climbed to a three-year high in New York this week, moving toward $70 a barrel, as political tensions in the Middle East threaten to strain supplies even further.
The IEA said “It is not for us to declare on behalf of OPEC that it is ‘mission accomplished,’ but if our outlook is accurate, it certainly looks very much like it.”
The IEA said, Oil inventories in developed nations are just 30 million barrels above their five-year average, the measure that OPEC is using to gauge whether markets are balanced. That’s down from more than 300 million barrels when the group started its cuts.
The producers, who are going meet in the Saudi city of Jeddah next week, have tested alternative metrics that drain out excessively-high stockpiles seen in recent years.
The IEA said, ”While OPEC members agreed to reduce output by about 1.2 million barrels a day, their actual cut last month was more than 60 percent bigger. The group’s 14 members pumped 31.83 million barrels a day in March, the lowest in almost three years. The 24 members bound by the wider accord have now cut output by almost 2.4 million barrels a day, more than their combined pledge of 1.8 million barrels.”
The forecasts were kept for global supply and demand in 2018 unchanged from last month’s report.