Global oil supply rose by 1.1 million barrels per day (mb/d) in August with the easing of OPEC+ production cuts, according to the International Energy Agency's (IEA) monthly oil report on Tuesday.
August’s supply rose to 91.7 mb/d with greater supplies from OPEC+ producers although non-OPEC compliance to the output cut deal was 100%, the report showed.
"In August, we saw the first impact of the easing of OPEC+ production cuts from 9.7 mb/d to 7.7 mb/d. We estimate the actual output increase by the group at 1.3 mb/d as some countries produced less than their target to compensate for earlier non-compliance [to the oil cut pact]," the report said.
OPEC's total oil supply increased to 24.51 mb/d in August, marking a rise of 830 thousand barrels per day (b/d) from the previous month's level of 23.68 million bpd in July.
In August, Saudi Arabia led OPEC's month-on-month gain, while the UAE also significantly increased its output.
"Though its output rose by 500 thousand b/d, Saudi Arabia’s crude supply in August was below its higher target of nearly 9 mb/d. At 8.94 mb/d, the Kingdom's production in August was 850 thousand b/d below a year ago," the report said.
- Global demand set to fall in 2020 but partially recover in 2021
The report said, “a resurgence of Covid-19 cases in many countries, local lockdown measures, continued teleworking and the weak aviation sector led to downward revisions of demand estimates for the third quarter and fourth quarter by 0.1 mb/d and 0.6 mb/d, respectively.”
The IEA estimates that global oil demand will decline by 8.4 mb/d in 2020 to 91.7 mb/d compared to last year, but recover by 5.5 mb/d in 2021 to 97.1 mb/d.
However, according to the report, demand in 2021 is set to remain below 2017 levels.
In 2020, the Asia Pacific region is anticipated to lead demand with 33.6 mb/d, followed by the Americas with 28.7 mb/d and Europe with 13.3 mb/d.
By Sibel Morrow and Firdevs Yuksel