There are signs the global oil market is returning to balance and stocks of oil products in industrialised nations could soon fall below their five-year average, the IEA said Wednesday. The International Energy Agency also said production by the OPEC cartel and its allies fell in August and compliance with their pact to cut supply to the markets increased.
OPEC and a number of other producers including Russia agreed last year on production cuts to ease a global supply glut, but prices haven't risen much above $50 per barrel as compliance has been a problem. But with oil demand perking up as well as hurricanes and regular summer maintenance knocking out some production, the IEA said it has seen some of that glut disappear.
Within industrialised countries that are members of the OECD oil "product stocks are now only 35 mb above the five-year average," the IEA said in its monthly report. Industry and government oil products stocks stood at 1,796.3 million barrels at in July in the 34 countries that make up the Organisation for Economic Cooperation and Development.
"Depending on the pace of recovery for the US refining industry post-(Hurricane) Harvey, very soon OECD product stocks could fall to, or even below, the five-year level," added the IEA. "Based on recent bets made by investors.
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