Oil Stocks Fall But Further Work To Be Done
Global oil stocks in 2Q17 dropped by an average of 0.5M b/d and preliminary data for July shows that stocks fell by almost 0.8M b/d, according to the International Energy Agency’s (IEA) August Oil Market Report. For the OECD, commercial oil inventories were estimated to be 3.02 Bn bbls at the end of 2Q17, below 2016 levels but still 219M bbls above the 5 year average. Furthermore, the IEA notes that even if OECD oil stocks fell by 0.5M b/d until the end of 1Q18 (when the current OPEC and non-OPEC output agreements are currently set to expire), inventories would still be 60M bbls above the 5-year average.
For oil supply in July, global output was said to have increased by 520K b/d m-o-m. This is the third consecutive monthly increase, with production in the month up by 500K b/d compared to July 2016. This was in part supported by a 230K b/d m-o-m rise in OPEC supply to a 2017 high of 32.84M b/d, led by a strong recovery in Libya.