The global oil market is tightening due to sharp production falls in Saudi Arabia and Venezuela, the International Energy Agency said Friday, but cautioned there are still "mixed signals" over the outlook for oil consumption and stock levels.
In its monthly oil market report published on April 11, the IEA warned that clouds are gathering over the outlook for demand.
While the agency kept its estimates for 2019 global consumption growth unchanged, predicting an expansion of 1.4 million barrels a day, or 1.4%, it highlighted a number of dangers, S&P Global reported.
Global oil demand stood at 99.3 million bpd in 2018.
With Brent oil futures having recently risen above $70 a barrel this month from a nadir of $50 at the end of 2018, the Paris-based agency was keen to point out that "the IEA has regularly warned of the dangers of prices rising even higher."
While demand in China, India and the US is estimated to have grown by 1 million bpd in January-February, it was a very different story for the OECD economies, the IEA noted.
"Overall demand in the OECD countries fell by 0.3 million bpd year on year in the fourth quarter of 2018, the first such fall for any quarter since the end of 2014, and it is likely to have fallen again in the first quarter of 2019 due to weakness in some European economies, with perhaps more to come if there is a disorderly Brexit," it said.
The IEA also pointed to uncertainties in Argentina and Turkey and that higher oil prices had not yet given the Middle East economies a substantial boost in terms of demand.
Global supply dropped 340,000 bpd in March due to the OPEC-led production cut deal and a sharp drop in output at sanctions-hit Venezuela, the IEA said.
The agency estimated that OPEC production in March fell 550,000 bpd to 30.1 million bpd as Saudi Arabia's output fell to its lowest level in two years, boosting compliance with supply cuts to 153%.
Saudi Arabia's production fell 320,000 bpd to 9.82 million bpd in March the IEA said, and noted indications are that output could stay close to this level in April, with exports down sharply.
