IEA Monthly Report: Hurricane IDA Offsets Opec Increase Forecast Global oil demand To Grow through year-end

On Tuesday, the International Energy Agency's monthly crude market report showed global oil supply fell 540,000 BPD in August to 96.1 million BPD  was expected to hold steady in September as Hurricane IDA offset Opec's planned output increase. If Opec + continues to reduce production cuts, the market will start to balance out in October  the world must wait for more oil supplies.

The IEA said global oil demand would fall by an average of 310,000 b/d per month  July to September. However, signs of an easing of the pandemic mean demand is now expected to rebound sharply in October by 1.6 million b/d  global oil demand will grow through the end of the year.

The IEA report said oil supplies would reach levels sufficient to replenish oil stocks by early 2022. Meanwhile, strategic oil stocks  the US  China could help fill some of the gap.

Supply problems

The IEA said unexpected production disruptions had temporarily halted the upward trend in global oil supplies that began in March, but it expected growth to resume in October.

As the chart above shows, global oil production unexpectedly fell in August after months of growth.

Hurricane IDA, a Category 4 storm that hit the U.S. Gulf Coast on August 29, initially cut 1.7 million barrels a day of oil production. Weeks later, the region is still struggling to restart many of the affected fields, the IEA said, forecasting a drop in oil production in the region this month of up to 650,000 barrels a day on average.

In addition, while most Opec members increased production in August, a few members  several oil-producing Allies produced less. Opec + crude supplies fell by 150,000 b/d to 41.58m b/d in August as output increases  Saudi Arabia, Iraq  Russia failed to offset production cuts  Nigeria, Kazakhstan  Mexico.

The IEA said it planned to restore another 400,000 b/d of spare capacity this month, with members including Nigeria, Angola  Malaysia still struggling to boost production.

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Source: China Energy Net