High oil stocks threatens price stability – IEA

Almaty. July 14. Silkroadnews – The International Energy Agency (IEA) warns about the oil price stability threat, RBC informs.

“Global crude markets are close to near balance, but high oil stocks are threatening the recent stability of prices,” statement by the analysts at the International Energy Agency said.

As specified in the agency’s report, the oil demand growth in the second quarter of 2016 exceeded the growth of supply, which significantly reduced the imbalance in the global crude market.

“According to the experts’ calculations, the total demand for oil in the second quarter grew at an annual rate of 1.4 million daily output. At the same time the daily volume of oil exports grew by 600 thousand barrels only, as for global oil production, it decreased by 750 thousand barrels a day: the Middle East countries that ramped up their production capacities still were not able to compensate for losses caused by non-OPEC production decline,” the publication says.

“Unless demand turns out to be stronger than we currently anticipate, products stocks could rise still further and threaten the whole price structure,” the IEA report warns.

According to analysts, commercial stocks of oil in countries of Organization for Economic Co-operation and Development (OECD) increased by 13.5 million barrels in May and stood at a record 3.074 billion barrels by the end of the month. Preliminary data for June suggests that OECD stocks added a further 900,000 barrels, while floating storage has continued to build, reaching its highest level since 2009.

“The IEA report emphasizes the decline in global oil refining output. In May (compared to April) it fell by almost 1 million daily output. As a result, for the first time in three years, the second quarter recorded decline in refining output compared to the previous year,” the statement says.