Global oil supply rose by 2.5 million barrel per day (mb/d) to 90 mb/d in July after Saudi Arabia ended its voluntary 1 mb/d cut, the UAE exceeded its OPEC+ target and US production started to recover, according to the International Energy Agency's (IEA) monthly oil report on Thursday.
The Organization of the Petroleum Exporting Countries (OPEC) crude production up from a near 30-year low in June. At 23.75 mb/d, OPEC's crude output was up 1.2 mb/d month-on-month (m-o-m) and down 5.5 mb/d year-on-year (y-o-y), according to the IEA's Oil Market Report for August 2020.
IEA stated that while OPEC+ cuts ease by nearly 2 mb/d this month and other producers restore shut-in volume, compensation for earlier OPEC+ over-production could keep world supply steady in August.
"Global oil demand is expected to be 91.9 mb/d in 2020, down 8.1 mb/d y-o-y. In this Report, we reduce our 2020 forecast by 140 kb/d, the first downgrade in several months, reflecting the stalling of mobility as the number of the novel coronavirus (Covid-19) cases remains high, and weakness in the aviation sector," the agency said.
Additionally, IEA estimates that the virus continues to impact road transport as people avoid non-essential trips and working from home remains the norm in much of the west countries.
By Gulsen Cagatay