Global oil supply in May increased by 900,000 barrels per day (bpd) to around 99 million bpd, the International Energy Agency (IEA) said in its monthly oil market report on Wednesday.
Non-OPEC+ provided all of the increase while OPEC+ volumes edged slightly lower on the month, according to the report.
Daily crude oil production of the OPEC group fell to 28.52 million bpd in May, with an decrease of about 210,000 bpd compared to the previous month.
During this period, OPEC natural gas liquids were recorded as 5.37 million bpd, increasing OPEC's total oil production to 33.89 million bpd last month.
Non-OPEC production saw a jump of around 1.11 million bpd to 65.09 million bpd in May.
According to the IEA, non-OPEC+ is poised to dominate world oil supply growth through the rest of this year and in 2023.
'From June through December, world oil production is projected to rise by 1.9 million bpd compared to a 1.2 million bpd increase in demand, of which collective non-OPEC+ supply is expected to climb 1.1 million bpd. The OPEC+ alliance may add 800,000 bpd assuming Libya rebounds from a severe drop, but deepening losses from Russia offset gains from Middle East producers,' the report said.
However, according to the IEA, higher OPEC+ flows will come at the expense of the bloc's effective spare capacity, held mostly by Saudi Arabia and the UAE.
The agency also noted that by the fourth quarter of this year, OPEC+' production buffer may fall to just 2.6 million bpd, heightening oil market volatility.
- IEA slightly revises up demand forecast for 2022
The IEA revised up its global oil demand estimates for 2022, marginally higher than last month's report, due to stronger than projected growth during March and April.
Global oil demand is projected to average 99.4 million bpd in 2022. Although the forecast marks a year-on-year rise of 1.8 million bpd, this remains 1 million bpd behind 2019 levels.
However, according to the agency's newly-released 2023 forecast, world oil demand is estimated to reach 101.6 million bpd in 2023, surpassing pre-pandemic levels.
'While higher prices and a weaker economic outlook are moderating consumption increases, a resurgent China will drive gains next year, with growth accelerating from 1.8 million bpd in 2022 to 2.2 million bpd in 2023,' the report said.
The IEA also said that in contrast to 2022 when the OECD led the expansion, non-OECD economies are set to account for nearly 80% of growth next year.
By Firdevs Yuksel