OECD Oil Inventories Rose by 15.4 Mb in May – IEA Oil Report

According to the recent July report by the IEA – International Energy Agency on the recent developments in the global crude oil market as of May/June 2012, the global oil supplies remained high in June; the non-OPEC supply also remain robust. OECD oil inventories expanded again during May.

According to the recent monthly report, during June, OPEC’s oil production remained high at 31.8 million bbl/d. The U.S sanctions on Iran and the EU oil embargo could affect the OPEC oil production in the months to follow. Nonetheless, the production hasn’t changed much during last month.

The non-OPEC countries’ oil production is expected to grow by 0.7 mb/d in 2013 to reach 53.9 mb/d. In 2012 the growth rate was only 0.4 mb/d. According to the report, the increase was mostly due to the rise in North America and Brazil’s oil supply.

The global oil demand projection is expected to rise by 0.8 mbbl/d to 89.9 mbbl/d during 2012 compared with 2011’s demand. In 2013 the expected growth is 1 mbbl/d to 90.9 mbbl/d.

In the report, the OECD industry oil inventories rose again by 15.4 million bbl to 2,672 million bbl in May 2012. The oil stockpiles are slightly below the 5-year average; this means that the oil market is keep loosening up in OECD countries, mainly in Europe; this was plausibly among the factors for the decrease in premium of Brent oil over WTI during last month.

This report doesn’t show many changes than in the previous month and there are still many questions about the future of the oil markets with respect to the recent tension between U.S Europe and Iran. Nonetheless, for the time being the global oil market is loosening up with a high oil production, no change in expected demand and OECD oil inventories on the rise.

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