Recent recovery in crude oil prices may be temporary: IEA
According to the IEA, crude oil prices may fall again after the recent revival as production in the US shows little sign of slowing and US crude stocks now stand at a record 468 million barrels, putting strains on storage capacity. "Behind the façade of stability, the rebalancing triggered by the price collapse has yet to run its course and it might be overly optimistic to expect it to proceed smoothly,” said the IEA in its monthly report.
The IEA also reportedly raised its forecast for US production for the first quarter of 2015. Sources stated that in February, non-OPEC oil production was estimated to have increased around 270,000 barrels per day (bpd) to 57.3 million bpd owing to higher output from North America. Global oil production also rose by 1.3 million bpd on the year to around 94 million bpd in February because of a 1.4 million bpd increase from non-OPEC countries.
Meanwhile, the IEA also raised their 2015 forecast for oil demand growth by 75,000 bpd to 1 million bpd, citing the fact that oil demand grew in the U.S. and Europe in December and January. The agency also stated that demand for OPEC crude will rise by 100,000 bpd to 29.5 million bpd this year.
Previously, the U.S. Energy Information Administration (EIA) raised its 2015 forecast for oil production in the US to 9.35 million barrels per day (bpd) in 2015, an upward revision from last month’s forecast of 9.3 million bpd. The EIA also reported that West Texas Intermediate crude futures are expected to be at around $52.15/barrel in 2015, down from the agency’s previous forecast of $55.02/barrel.
NYMEX April crude was down $1.12 to settle at $47.05/barrel on March 12 while ICE April Brent crude was down 46 cents to settle at $57.08/barrel.
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