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By Noah Browning
LONDON, May 12 (Reuters) - Oil demand is already
outstripping supply and the shortfall is expected to widen even
if Iran boosts exports as vaccinations against COVID-19 bolster
the global economy, the International Energy Agency (IEA) said
on Wednesday.
"The anticipated supply growth through the rest of this year
comes nowhere close to matching our forecast for significantly
stronger demand beyond the second quarter," the IEA said in its
monthly report, citing increased pumping from OPEC+ countries.
Output from the Organization of the Petroleum Exporting
Countries (OPEC) and allies including Russia, the so-called
OPEC+ group of producers, lagged demand by around by 150,000
barrels per day (bpd) in the second quarter, IEA said.
That shortfall is expected to widen to a 2.5 million bpd by
year's end, the Paris-based watchdog said.
OPEC+ producers have been curbing output since 2017 but have
eased since imposing record high cuts last year, with more
easing agreed from this month.
"The widening supply and demand gap paves the way for a
further easing of OPEC+ supply cuts or even sharper stock
draws," the IEA said, noting that storage of oil had ebbed to
nearly the five-year-average after soaring amid the pandemic.
Getting inventories back down to the five-year average was,
along with supporting prices, one of the aims of the OPEC+ cuts
to begin with.
Iran's possible full reentry into the oil market, if
indirect U.S.-Iranian nuclear talks succeed, would still leave
production from OPEC+ producers at 1.7 million bpd short of
demand, it added.
Supply recovery outside OPEC+ was recovering more slowly
than the IEA expected as the virus delayed projects in Brazil
and the Gulf of Mexico and hampered maintenance in Canada.
While new waves of infections in Brazil and Thailand and
even India - the world's third-largest consumer suffering
record-breaking cases - were not enough to derail the trend but
could continue to affect the market, it added.
"India's COVID crisis is a reminder that the outlook for oil
demand is mired in uncertainty. Until the pandemic is brought
under control, market volatility is likely to persist."
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Oil supply response https://tmsnrt.rs/2SIMrds
Call on OPEC+ crude vs. production https://tmsnrt.rs/3hgBzxD
Global oil supply https://tmsnrt.rs/33DVYEF
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