IEA Report Confirms Oil Markets Are Still Tightening

Standard Oil

Photo: History Central

Oil markets have tightened somewhat in the past month, the International Energy Agency reported this morning.Demand is set to expand by 0.8 mb/d (or 0.9%) in 2012 to 90.0 mb/d, compared with 89.2 mb/d of oil products in 2011.

That is part of a secular demand increase, the agency said.

“After next to no growth in 4Q11, the predicted trend will accelerate through the year to 1.3% by 4Q12.”

Supplies have increased to try to meet consumption, the agency said. Compared to a year ago, global oil production stands 3.9 mb/d higher, and increased 0.6 mb/d to 91.0 mb/d in April. OPEC crude supply in April rose by 410 kb/d, to 31.85 mb/d.

But the market remains highly volatile:

“…Some of the nervousness which drove prices to record highs in March has receded. But there is no room for complacency: the path of market fundamentals for the rest of the year remains highly uncertain and geopolitical risks will likely continue to keep prices high.”

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