Crude oil prices have been pushed higher and above the USD-51-per barrel-mark during early June due to production shortfalls and declines in a number of areas, the International Energy Agency (IEA) said on Tuesday.
In its latest monthly Oil Market Report (OMR), the agency also noted higher-than-forecast demand levels in early 2016 and a constant increase in demand growth levels into 2017.
The OMR indicated that "continuing outages in Nigeria and Canada as well as a steady decline in US oil production" had stoked prices in recent weeks as global supply fell by nearly 800,000 b/d in May to stand at 95.4 million barrels per day. This is around 590,000 b/d lower than output at the same time in 2015 and is "the first significant drop since early 2013." Non-OPEC output growth is expected to only recover slightly by 200,000 b/d in 2017 after a forecast decline of 900,000 b/d this year, the IEA said.
As for OPEC, output also declined in May by 110,000 b/d to stand at 32.61 barrels per day, due largely to "big losses in Nigeria due to oil sector sabotage." Increased Middle East production could not make up the shortfall, although the report noted Iranian fast-track output, which could add as much as 700,000 b/d to that country's production levels.
On the demand side, the IEA revised upwards its earlier estimates for the first quarter of 2016, indicating that demand growth in the period was 1.6 barrels per day, bringing the expected average growth for the whole year to 1.3 barrels per day .
Average daily crude oil demand for 2016 is now pegged at 96.07 barrels per day. The OMR also provided its first forecast for demand growth in 2017, predicting a constant rate of 1.3 barrels per day to give average oil demand of 97.36 barrels per day next year.