April was an extraordinary month for oil markets with Covid-19 demand destruction leaving the market massively oversupplied, according to the International Energy Agency's (IEA) report on Thursday.
The IEA explained that benchmark oil prices continued to fall in April as global oil demand weakened due to Covid-19 measures implemented to contain its spread, as well as record-high rates of production from Middle East producers.
OPEC crude oil output for the month was up 2.38 million barrel per day (mb/d) month on month (m-o-m) and stood at 30.73 mb/d.
On April 12, OPEC+ members announced their agreement to cut supplies by an unprecedented 9.7 mb/d from May 1 to bring balance to the market, according to the report.
The agency said that product markets continued to suffer in April. It said, "in particular, jet fuel cracks fell into negative territory as more flight cancellations were announced making a near-term rebound in aviation activity look unlikely."
-Oil market in May
Global oil supply is set to fall by a spectacular 12 mb/d in May to a nine-year low of 88 mb/d, as the OPEC+ agreement takes effect and production declines elsewhere.
The IEA explained the peak decline for global refining activity has shifted to May as their April throughput estimate was revised up on new data and higher demand.
By Gulsen Cagatay