IEA raises outlook on 2018 oil demand, sees market rebalancing

The global supply, meanwhile, eased in February to 97.9 million bpd – up 0.7 million bpd from last year due to higher non-OPEC output, IEA said in its latest monthly oil market report.

The agency expects production growth in the US to boost this year's non-OPEC expansion to 1.8 million bpd compared to 760,000 bpd in 2017.

However, IEA noted that all key indicators point to a market that is moving towards rebalance.

“Market re-balancing is clearly moving ahead with key indicators – supply and demand becoming more closely aligned, OECD stocks falling close to average levels, the forward price curve in backwardation at prices that increasingly appear to be sustainable – pointing in that direction,” the report said.

According to IEA, OECD commercial stocks rose in January for the first time in seven months. It, however, added that the increase of 18 million barrels was half the average level for January seen in the past five years.

Meanwhile, the surplus of total OECD stocks against the five-year average fell for the ninth successive month to 50 million barrels, with products showing a very small deficit.

Crude oil production from Organization of Petroleum Exporting Countries (OPEC) edged lower in February to 32.1 million bpd, led by losses in Venezuela and the United Arab Emirates.

IEA expects OPEC crude to rise steadily to 32.6 million bpd in the second half of 2018.