IEA says oil glut to ease
A global oil glut that has hit energy companies hard but meant cheap prices for consumers is set to ease by this year end, the International Energy Agency said on Thursday.
However, the agency said any potential production freeze agreed by leading oil producers, who are due to meet in Qatar on Sunday, would only have a "limited" impact on supplies. Ahead of the highly anticipated Doha talks, the 29-nation IEA said the oil market, which for months has been depressed by a vast oversupply, was expected to practically balance out in the second half of the year.
Prices shot to 2016 highs this week and are now well over $40 a barrel after plummeting below USD 30 early in the
year. They are nevertheless far below the USD 100-a-barrel mark of mid-2014.
The IEA said in its monthly oil market report that it still anticipates "steady oil demand growth and falling non-OPEC supply", referring to producers outside of the
Organization of the Petroleum Exporting Countries (OPEC). "This scenario is now taking shape and the oil market
looks set to move close to balance in the second half of this
year," it said. Expectations that the Doha meeting will agree to freeze output have helped buoy prices recently after reports that
OPEC kingpin Saudi Arabia and non-OPEC producer Russia had reached a consensus on freezing output, boosting hopes of a
"We cannot know the outcome but if there is to be a production freeze, rather than a cut, the impact on physical
oil supplies will be limited," said the IEA, which gives advice to countries on energy policy.