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By Noah Browning
LONDON, Feb 11 (Reuters) - Global oil supply still outstrips
demand due to persistent COVID-19 lockdowns and the spread of
variants, the International Energy Agency (IEA) said on
Thursday, but vaccines should help demand recover and soon
enable producers to pump more.
"With demand forecast to rise strongly and still modest
growth in non-OPEC supply expected, a rapid stock draw is
anticipated during the second half of the year."
"That sets the stage for OPEC+ to start unwinding cuts."
The Paris-based energy watchdog kept its outlook for oil
demand growth in 2021 largely steady, saying a decline in the
first quarter of this year from already low levels in the last
quarter of 2020 would soon reverse.
"The forecasts for economic and oil demand growth are highly
dependent on progress in distributing and administering
vaccines, and the easing of travel restrictions in the world's
major economies," it said.
A more optimistic outlook from the International Monetary
Fund for global GDP growth and a more robust forecast for
recovery in the United States helped offset relatively slow
rollouts of vaccines in Europe in the IEA's predictions.
As the market continues to struggle in the short term, the
commitment by members of the Organization of the Petroleum
Exporting Countries (OPEC) and allies, known as OPEC+, to hold
supply steady through March is drawing down crude oil storage.
Industry oil stocks in OECD countries fell for the fifth
straight month in December, the IEA said, with global implied
stock draws increasing to 2.24 million barrels per day (bpd) in
the fourth quarter from 1.56 million bpd in the third.
The rebalancing market is causing non-OPEC+ producers such
as the United States and Canada to cautiously increase supply,
the IEA said.
But this ought not to dampen the potential for OPEC+
producers to do likewise in the second half of the year, it
said, "even if producers outside the group ramp up faster than
currently projected".
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Demand/supply balance https://tmsnrt.rs/3d0yzmK
Oil supply response https://tmsnrt.rs/2LGk6Bp
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