The IEA, a Paris-headquartered international agency that is run by members of the Organisation for Economic Co-operation and Development (OECD), in its most recent oil market report also cut its demand forecast for 2012 by 400,000 bbl/day to 90.7m bbl/day.
Amid recent negative economic developments, the report has lowered its global GDP growth assumptions for 2011 and 2012 to 3.9% and 4.2%, respectively, down from 4.2% and 4.4% previously, the agency added.
The agency also attributed its decision to cut the forecast to lower-than-expected oil demand readings in the third quarter of the year in non-OECD member countries, particularly in Asia and Latin America.
However, the IEA said that “stronger-than-expected OECD monthly submissions and preliminary data – largely in the US – provide some offsetting support, as do [oil-fired] power generation needs in Japan, the Middle East and an anticipated recovery in Libyan consumption”.
World oil supply rose by 1.0m bbl/day in August, to 89.1m bbl/day, with non-OPEC production up by 800,000 bbl/day, the IEA said, adding that rising US and Latin American production offset heavy maintenance and field outages in the North Sea.
“Non-OPEC supply is expected to increase during the second half of the year on growth from the US, Latin America, and the Caspian region,” the IEA said.
The report also said that OECD industry oil inventories rose by 10.8m bbl to 2.69bn bbl in July because of product restocking, however, stronger refinery runs combined with lower production reduced crude oil inventories.
This resulted in a weaker-than-average monthly stockbuild and OECD inventories fell 12.8m bbl below the five-year average and 81m bbl below year-ago levels.
“This is the first time total industry stocks have slipped below the five-year average since June 2008,” the IEA said.
