IEA forecast sees oil glut coming to an end soon
The International Energy Agency said Thursday that higher than expected Iranian oil production has helped stabilize the global oil market by offsetting concerns generated by wildfires in Canada and violence in Nigeria.
In its monthly report, the Paris-based IEA said oil output from OPEC countries rose to 32.7 million barrels a day in April, a figure boosted by Iran as its production increased faster than expected following the lifting of international sanctions earlier this year.
The IEA is forecasting a sharp drop in the global oil supply surplus by the year's end, which should push the market toward "much-anticipated balance" after a volatile couple of years.
Oil prices fell in April after leading producers failed to agree on production cuts, but have since risen after troubles in oil-producing Canada and Nigeria threatened output.
The IEA said it's unclear how deeply the damage from a devastating, ongoing wildfire in Canada's oil sands town of Fort McMurray will hurt overall production.
In Nigeria, Shell closed the terminal exporting the country's benchmark Bonny Light crude oil Wednesday and evacuated workers from a threatened oil field after new deadly violence by militants demanding a bigger share of the country's oil wealth. Chevron's Escravos oil and gas facility closed after a bomb attack.
The IEA also noted concern about falling production in Libya, which is split among warring factions, and economically atrophying Venezuela.
Overall oil prices have recovered slightly this year to the $45 a barrel range but remain much lower than in recent years.
Despite concerns about a global economic slowdown, oil demand grew more than originally thought in the first quarter, the IEA said. It's maintaining its forecast for global oil demand growth of 1.2 million barrels per day for 2016.