Global oil markets are heading toward a long-awaited equilibrium, according to updated supply and demand data from the International Energy Agency.
The IEA said in its latest oil market report on Thursday that a rebalancing of supply and demand was starting to become evident from the supply and demand data that showed global oil supply was starting to look more measured.
Demand was resilient and a surplus of oil could start to shrink later this year, it added, CNBC reported.
"Global oil supplies rose 250,000 barrels a day in April to 96.2 million bpd, as higher OPEC output more than offset deepening non-OPEC declines," IEA said in its monthly report.
However, it noted that year-on-year, "world output grew by just 50,000 barrels a day in April versus gains of more than 3.5 million barrels a day a year ago" and noted that 2016 non-OPEC supply is forecast to drop by 800,000 barrels a day to 56.8 million bpd.
Despite the higher output from the 13-member group, IEA noted that falling non-OPEC supply and rising demand could cause oil stock growth to decline in the latter half of the year helping the supply and demand dynamic–and crucially, oil prices–to return to a more stable footing.
IEA noted that OPEC crude output rose once again in April and that while Saudi output was steady near 10.2 million bpd, Iranian supply rose to 3.56 million barrels, a level last hit in November 2011 before sanctions were tightened.
The agency noted that oil stocks in the OECD (Organization for Economic Cooperation and Development, which includes most European nations, Australia and the US) declined for the first time in a year in February, lending support to the view that "the global supply surplus of oil will shrink dramatically later this year".
In terms of demand, IEA left its outlook for global oil demand growth in 2016 at a "solid" 1.2 million bpd, unchanged from last month.
It said India was the "star performer" in terms of oil demand growth, having imported 400,000 barrels a day higher in the first quarter from the same period of last year.
