The International Energy Agency confirms that global oil markets are now adequately supplied and that global spare production capacity remains at comfortable levels.
As a result of OPEC’s high compliance rate with the agreed supply cuts in the OPEC+ group, global spare production capacity has risen to 3.3 mb/d, with 2.2 mb/d held by Saudi Arabia and around 1 mb/d by the UAE, Iraq and Kuwait.
Saudi Arabia’s output in March dropped to 9.8 mb/d after it cut far more than required under the supply cuts. This is more than 1 mb/d below the record high of 11.1 mb/d that Saud Arabia pumped last November.
Total oil supplies from the US are expected to grow by 1.6 mb/d this year. And as infrastructure bottlenecks in the US are easing, oil exports are now more able to keep pace with production trends.
OECD oil inventories at the end of February 2019 were at 2,871 million barrels, which is above the five-year average.
The IEA says that with global economic growth increasingly fragile, consumers and producers should take steps to avoid higher oil procies that will prove painful to all.