The International Energy Agency on Thursday left its forecast for global oil demand in 2022 in place, while world oil supplies fell by 710,000 barrels per day in April as Russia shut in one-million bpd of production.
In the May issue of its influential Oil Market Report, the agency left its forecast for 2022 demand unchanged at 99.4-million barrels day. Global oil inventories fell for a fifteenth-consecutive month in March, though the release of strategic reserves from the United States and other OECD members are tempering the inventory drop.
"Global observed oil inventories declined by a further 45 mb during March and are now a total 1.2 billion barrels lower since June 2020. In the OECD, the release of 24.7 mb of government stocks during March halted the precipitous decline in industry inventories. OECD industry stocks rose by 3 mb to 2 626 mb, but remained 299 mb below the five-year average. Preliminary data for April show OECD industry inventories increased by 5.3 mb," it said in the report.
The agency said Russia is likely to be forced to shut in additional oil production as the European Union and the G7 countries look to ban imports from the country following its invasion of Ukraine. However rising production elsewhere and lower demand from China is expected to fend off a supply deficit.
"Despite mounting international pressure and falling oil production, Russian exports have so far held up by and large. But now major trading houses are winding down deals ahead of a 15 May deadline to halt all transactions with state-controlled Rosneft, Gazprom Neft and Transneft. Following a supply decline of nearly 1 mb/d in April, losses could expand to around 3 mb/d during the second half of the year," it noted.
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