UPDATE 2-Oil market falls too big to offset with output cuts, IEA warns

(Adds IEA chief, detail, graphics)
By Noah Browning
LONDON, April 15 (Reuters) - The International Energy Agency
(IEA) on Wednesday forecast a 29 million barrel per day (bpd)
dive in April oil demand to levels not seen in 25 years and
warned no output cut by producers could fully offset the
near-term falls facing the market.
Benchmark Brent crude futures LCOc1 fell following the
IEA's monthly report, trading down more than 4% or $1.30 to
$28.30 per barrel at 1027 GMT.
The IEA forecast a 9.3 million bpd drop in demand for 2020
despite what it called a "solid start" by producers following a
record deal to curb supply in response to the coronavirus
pandemic.
"By lowering the peak of the supply overhang and flattening
the curve of the build-up in stocks, they help a complex system
absorb the worst of this crisis," the Paris-based IEA said in
its monthly report.
"There is no feasible agreement that could cut supply by
enough to offset such near-term demand losses. However, the past
week's achievements are a solid start."
Organization of the Petroleum Exporting Countries (OPEC) and
other producers including Russia on Sunday agreed a record cut
in output from May of 9.7 million bpd, or almost 10% of global
supply, to help support prices and curb oversupply. Ahead of that, however, April could prove the worst month
ever for the industry as production is set to increase while
demand tumbles amid economic lockdowns around the world, IEA
Executive Director Fatih Birol said.
"When we look back on 2020 we may well see that it was the
worst year ... April may well have been the worst month - it may
go down as Black April," Birol told reporters on a call.
Oil producers "lost two very important months", Birol added,
referring to events including the failure of producers in early
March to agree on cutting output. Instead, Saudi Arabia, Russia
and others pledged to increase production as they looked to grab
back market share.
Now, in addition to planned supply cuts, some nations are
expected to boost buying for strategic reserves.
The IEA said it was "still waiting for more details on some
planned production cuts and proposals to use strategic storage",
noting the United States, India, China and South Korea have
either offered or are considering such purchases.
"If the transfers into strategic stocks, which might be as
much as 200 million barrels, were to take place in the next
three months or so, they could represent about 2 million bpd of
supply withdrawn from the market," the IEA said.
Birol said the IEA's forecasts on such purchases were based
on "our communications with the countries, what we see in the
press and the countries' public announcements".

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Oil supply response https://reut.rs/3bh4n3m
Total non-OPEC supply https://reut.rs/3etyYwD
Demand/supply balance https://reut.rs/2RE7jyV
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