Oil demand and supply balances almost balanced out in the first quarter of 2017 according to the IEA.
The Agency's May report highlights that globally, stock built by 0.1 million barrels per day. For OECD countries, stocks grow by 0.3 million barrels per day for the first quarter of 2017 as a while, nearly offset by falls in floating stocks and in other centres.
The report notes that it has taken some time for stocks to reflect lower supply when volumes produced before output cuts by OPEC and 11 non-OPEC countries took effect are still being absorbed by the market.
It states: 'Re-balancing is essentially here and, in the short term at least, is accelerating.'
Looking ahead to the second quarter 2017, and assuming that April's OPEC crude oil product level of 31.8 million barrels per day is maintained, and nothing changes elsewhere, the report says there is an implied stock draw of 0.7 million barrels per day.
It states: 'Adopting the same scenario approach for the second half of 2017, the stock draws are likely to be even greater. Even if this turns out to be the case, stocks at the end of 2017 might not have fallen to the five-year average, suggesting that much work remains to be done in the second half of 2017 to drain them further.
'In addition to production cuts and steady demand growth, a major contribution to falling crude stocks in the next few months will be a ramp-up in global crude oil runs. Starting in March, refinery activity is building up and by July global crude throughputs will have increased by 2.7 million barrels per day.
'Of course, things will change elsewhere in the balance, and today the most closely watched data point on the supply side is US crude production.'
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