As per report from sources OPEC had said on Tuesday oil inventories had continued to rise despite a global deal to cut supply and raised its forecast of production in 2017 from outside the group, suggesting complications in the effort to clear a glut. The Organization of the Petroleum Exporting Countries is curbing its output by about 1.2 million barrels per day (bpd) from Jan. 1, the first cut in eight years. Russia and 10 other non-OPEC producers agreed to cut half as much.
But in its monthly report, OPEC said oil stocks in industrialized nations rose in January to stand 278 million barrels above the five year average, of which the surplus in crude was 209 million barrels and the rest refined products. OPEC had said in the report that "Despite the supply adjustment, stocks have continued to rise, not just in the U.S., but also in Europe”. Nevertheless, prices have undoubtedly been provided a floor by the production accords.
Oil prices LCOc1 fell after the release of the report to
trade close to $50 a barrel, their lowest since November. Crude is still up
from about $40 a barrel a year ago and a 12-year low near $27 reached in
January 2016. OPEC revised upward its forecast for world oil demand in 2017 and
said the requirement for OPEC crude would average 32.35 million bpd more than
current production, suggesting stocks will drop if output does not rise.
OPEC uses two sets of data to monitor output - figures provided by each country and by secondary sources, which include industry media. This is a legacy of old disputes over real production levels. Production levels reported to OPEC by other members in February including Algeria, Iraq, the United Arab Emirates and Venezuela were also higher than estimated by the secondary sources.
