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Oil market flipping into deficit in Q2 2019 - IEA

Gasoil News - Published on Tue, 19 Mar 2019

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The International Energy Agency said that the oil market will flip into a modest deficit from the Q2 of this year, with OPEC possessing a hefty supply cushion to prevent any price rally in case of possible supply disruptions. The IEA, which coordinates the energy policies of industrialised nations, kept its forecast of growth in global oil demand this year unchanged at 1.4 percent, or 1.4 million barrels per day. Solid growth in non-OPEC oil output led by the United States should ensure demand is met.

The Paris-based IEA said the market could show a modest surplus in the first quarter of 2019 before flipping into a deficit in the second quarter by about 0.5 million bpd.

The IEA said that "At the same time, (OPEC) production cuts have increased the spare capacity cushion. This is especially important now as economic sentiment is becoming more pessimistic and the global economy could be entering a vulnerable period."

The agency said that it was particularly concerned about a possible further decline in production in Venezuela, where output has stabilised at 1.2 million bpd in recent months. The degradation of the Venezuelan power system, vital for oil output, was such that it could not be sure whether fixes were durable.

The IEA, however, said that in the event of a major loss of Venezuelan supply, the Organization of the Petroleum Exporting Countries had about 2.8 million bpd of effective spare capacity.

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Posted By : Rabi Wangkhem on Tue, 19 Mar 2019
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