marc, And here are those IEA comments for those who missed them...
FOCUS-Oil steady as stockdraw outlook brightens
LONDON, June 11 (Reuters) - Oil prices traded sideways on Friday but drew support from a bullish report of tight OPEC production discipline and recovering world demand growth.
North Sea marker crude Brent blend for July was trading unchanged at $16.07 at 1300 GMT, up from a February low point this year of less than $10.
Sentiment was propped up by supply estimates compiled by the West's energy watchdog showing stringent OPEC supply curbs have started slicing into world oil stockpiles.
Painting a bright picture for exporting countries, the Paris-based International Energy Agency added that the prospects for world petroleum demand growth this year were improving.
The agency's monthly Oil Market Report said it had identified a key turning point for surplus petroleum stockpiles.
Though still high, the year-on-year global inventory surplus had fallen in April for the first time in two and a half years, dropping
34 million barrels, to 2.65 billion.
''The implied stockdraw for the rest of the year is definitely favourable to oil exporters,'' said David Knapp, editor of the IEA
report.
''We're on track now for a big reduction in inventories so we're bound to get higher prices -- something in the order of $17.50 a barrel for Brent on average in the fourth quarter,'' said Leo Drollas of London's Centre for Global Energy Studies.
The stockdraw happened despite record deliveries from Russia where a slump in domestic demand and the weak rouble currency have released more supply for export, the IEA said.
The IEA said it had identified good news for oil exporters in the form of the green shoots of recovery in Asian demand.
As a result, the agency revised higher its projection for world oil consumption in 1999 by 300,000 bpd.
It now sees demand this year rising to 75.1 million bpd, a growth of just over a million barrels daily.
It said oil exporters were sticking to the task of erasing surplus stocks by adhering to supply limits announced in March.
The Organisation of the Petroleum Exporting Countries cut output by 320,000 bpd in May to 26.06 million, raising compliance with the targeted limits to 90 percent from 82 percent in April, the report estimated.
The agency also warned that international oil companies were keeping such a tight leash on spending that concerns were rising for the impact on world oil supplies.
''From the new supermajors to small independents, the experience of the last couple of years has resulted in a major shift in emphasis from volume growth in production and reserves to profitability performance,'' it said.
The warning emerges as antitrust authorities in the European and the United States announced full investigations into the proposed merger between Exxon (NYSE:XON - news) and Mobil (NYSE:MOB - news) and newly-merged BP Amoco's (quote from Yahoo! UK & Ireland: BPA.L) purchase of U.S. ARCO.
(Note: this article is ''in progress''; there will likely be an update soon.) |
