IEA Sees Oil Inventory Reaching This Key OPEC Target 'Very Soon'

IEA Sees Oil Inventory Reaching This Key OPEC Target 'Very Soon'

IEA Sees Oil Inventory Reaching This Key OPEC Target 'Very Soon'

The global oil surplus is beginning to shrink due to stronger-than-expected European and USA demand growth, as well as production declines in OPEC and non-OPEC countries, the International Energy Agency said on Wednesday.

"Depending on the pace of recovery for the USA refining industry post-Harvey, very soon OECD product stocks could fall to, or even below, the five-year level", it said referring to Hurricane Harvey which hit the United States two weeks ago.

Russia's output made up 316,000 barrels against 300,000 barrels per day.

It now sees global oil demand increasing by 1.6 million barrels per day, to 97.7 mbd on average in 2017, thanks to brisk consumption in Europe and the United States. OPEC sees higher demand for its oil in 2018 as the global market tightens.

OPEC output fell in August for the first time in five months, after turmoil in Libya disrupted flows and other member countries reduced production.

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The global surplus of crude and stocks over the five-year average fell to 190 million barrels.

"Depending on the pace of recovery for the U.S. refining industry post-(Hurricane) Harvey, very soon OECD product stocks could fall to, or even below, the five-year level", added the IEA. Demand rose by 2.3 million barrels a day in the second quarter of this year. Compliance levels in August hit 82 per cent compared with 75 per cent.

Global oil demand is set to accelerate faster than anticipated this year, according to the International Energy Agency (IEA), which has revised up its 2017 growth estimates.

The International Energy Agency could have coordinated a broader release from strategic stockpiles, but said at the peak of Harvey's impact that government efforts were working.

The IEA the impact of Hurricane Harvey, which struck the US Gulf Coast at the end of August where significant US refinery and export operations are concentrated, on oil markets should be brief. As of 2:00 p.m. EDT Tuesday, the government said that four refineries in the Gulf Coast were still closed because of issues associated with Harvey, representing about 4 percent of the total USA refining capacity. In its latest market report, the IEA said the severe weather should still serve as a warning to the oil sector.

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