Oil stocks in industrialised nations may be headed for their biggest fall in more than 10 years as Opec production cuts bite, the International Energy Agency (IEA) said today as it built a case for more Opec oil.
Opec ministers are meeting in Vienna on Thursday to determine output. At its last two meetings the group, which pumps over a third of the world's oil, agreed to curb supplies by 1.7 million barrels per day, roughly 6 per cent.
"In reality, stock trends and prices are signalling that higher Opec exports will be needed in the months ahead," wrote the IEA, adviser to 26 industrialised nations.
Tighter Opec supplies and a February cold snap in the United States contributed to the decline.
"Preliminary data suggest that OECD stocks have fallen by over 1.26 million bpd over the first two months of the year, and could be heading for the largest first quarter stock draw for over 10 years," the IEA said.
International Energy Agency
It pinpointed a sizeable supply risk from the resource nationalism that has swept Venezuela, Bolivia and Russia. Greater state control of energy resources and the temptation to siphon off revenues threaten to choke investment, the IEA said.
At around $59 a barrel, oil is well off its $78.40 record high of last July, but it is still three times the price seen at the start of 2002 when Asian demand kicked in.
The IEA kept its 2007 world oil demand forecast steady at 86 million bpd, up 1.8 per cent on 2006.
It estimated oil supplies from the 10 Opec members bound by output restrictions fell to 26.76 million bpd in February, down 365,000 bpd from January.
All Opec nations, including Iraq and Angola, pumped 30.2 million bpd in February, down 125,000 bpd from January. The IEA put demand for Opec oil in the range 30.7 million bpd to 31.6 million bpd in 2007.