(Adds details)
By Noah Browning
LONDON, April 14 (Reuters) - Output cuts announced by
OPEC+ producers risk exacerbating an oil supply deficit expected
in the second half of the year and could hurt consumers and
global economic recovery, the International Energy Agency (IEA)
said on Friday.
OPEC+ and the IEA have jousted in recent months over their
outlooks for global oil supply and demand.
Consumer countries represented by the IEA have argued that
tightening supplies drive up prices and could threaten a
recession, while OPEC+ blames Western monetary policy for market
volatility and inflation which undercuts the value of its oil.
"Oil market balances were already set to tighten in the
second half of 2023, with the potential for a substantial supply
deficit to emerge," the IEA said in its monthly oil report.
"The latest cuts risk exacerbating those strains, pushing
both crude and product prices higher. Consumers currently under
siege from inflation will suffer even more from higher prices."
The IEA saw 2023 demand at a record 101.9 million barrels
per day, up 2 million barrels per day on last year and on par
with its prediction last month.
OPEC+ called its surprise cut decision a "precautionary
measure" and in a monthly oil report published on Thursday OPEC
cited downside risks to summer oil demand from high stock levels
and economic challenges.
The IEA said it expected global oil supply to fall by
400,000 bpd by the end of the year citing an expected production
increase of 1 million bpd from outside of OPEC+ beginning in
March versus a 1.4 million bpd decline from the producers bloc.
Gains outside the producer alliance were due to be led by
the United States and Brazil, with Norway and Ecuador also
making significant contributions.
Rising global oil stocks may have influenced the OPEC+
decision, the IEA added, noting the Organisation for Economic
Cooperation and Development (OECD) industry stocks in January
hit their highest level since July 2021 at 2.83 billion barrels.
The demand picture will be skewed between lacklustre growth
in OECD countries and rebounding demand led by China after the
relaxation of its COVID-19 restrictions, the IEA said.
Meanwhile Russian oil exports in March hit their highest
levels since April 2020 on robust oil product flows, the IEA
said, despite a seaborne import ban from the European Union and
a price cap sanctions policy spearheaded by the United States.
Russia's March revenue rose by $1 billion month on month to
$12.7 billion, but was still 43% lower than a year earlier
partly due to capped prices on its seaborne oil exports.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global oil supply/demand World Total Oil Demand Supply/Demand Balance ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Noah Browning; editing by Jason Neely and
Christina Fincher)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.