The global oil stocks surplus is close to evaporating, OPEC said on Thursday, citing healthy energy demand and its own supply cuts while revising up its forecast for production from rivals who have benefited from higher oil prices.
But as oil production collapsed in OPEC member Venezuela and is still facing hiccups in countries such as Libya and Angola, the oil exporters’ group is still producing below its targets meaning the world needs to use stocks to meet rising demand.
The Organization of the Petroleum Exporting Countries said in its monthly report oil stocks in the developed world reversed a rise in January to fall by 17.4 million barrels in February to 2.854 billion barrels, around 43 million barrels above the latest five-year average.
“We have achieved an over 150 percent conformity level,” OPEC Secretary-General Mohammad Barkindo told Reuters in New Delhi, referring to OPEC’s commitments under the supply-cutting pact. He said the glut has effectively shrunk by nine-tenths since the start of 2017.
“We have seen an accelerated shrinkage of stocks in storage from unparalleled highs of about 400 million barrels to about 43 million above the five-year average,” Barkindo said.
Stock levels are now 207 million barrels below their level in February 2017, with crude stocks in a surplus of 55 million barrels and product stocks in a deficit of 12 million.