PARIS: A glut in global oil markets is being worked off as the world economy begins to recover from the COVID-19 pandemic and as OPEC and its allies restrain production, the IEA said Wednesday.
The International Energy Agency raised its expectations for the recovery in oil demand after the International Monetary Fund increased its forecasts for global growth this year.
“This improved outlook, along with stronger prompt indicators, has led us to revise up our 2021 global oil demand growth forecast,” said the Paris-based body with advised oil consuming nations.
It now expects world oil demand to rise by 5.7 million barrels per day (bbd) to 96.7 million bbd, following last year’s drop of 8.7 million bpd.
OPEC on Tuesday also raised its 2021 demand forecast to 96.5 million bbd.
Oil demand was hammered last year as many countries shut down swathes of their economies in a bid to slow the spread of COVID-19.
That caused a glut in supplies, but the so-called OPEC+ group that includes heavyweight producer Russia, sharply cut output last year to reduce that and counter the plunge in prices that briefly saw some turn negative as storage ran short.
That glut appears to have been largely worked off.
The IEA said preliminary data suggest that OECD oil stocks held largely steady in March, following seven consecutive months of draws, and were heading close to their five-year average.
OPEC+ has been slowly increasing output since the beginning of the year and at the beginning of April signalled it would lift output by more than 2 million bpd in the coming three months in the face of an expected rise in demand.
While the first quarter was somewhat disappointing as many European and several major emerging economies saw a resurgence of COVID-19, global growth is expected to pick up as vaccination campaigns begin to have an impact.
IEA sees the global oil market changing “dramatically in the latter half of this year as nearly 2 million bbd of extra supply may be required to meet expected demand growth.”
But with OPEC+ still having plenty of additional production capacity that it can bring back on line, the IEA does not see a supply crunch developing.
“The bloc’s monthly calibration of supply may give it the flexibility to meet incremental demand by ramping up swiftly or adjusting output lower should the demand recovery fail to keep pace,” it said.
IEA: Goodbye oil glut thanks to OPEC+ and recovery
https://arab.news/g7wag
IEA: Goodbye oil glut thanks to OPEC+ and recovery
- OPEC also raised its 2021 demand forecast
- now expects oil demand to rise by 5.7 million barrels per day
Closing Bell: Saudi equities continue 4-day upward trend
RIYADH: Saudi equities closed higher on Wednesday, with the Tadawul All Share Index rising 51.52 points, or 0.47 percent, to finish at 10,945.15.
Trading activity was robust, with 373.9 million shares exchanged and total turnover reaching SR6.81 billion.
The MT30 Index also ended the session in positive territory, advancing 11.93 points, or 0.82 percent, to 1,472.82, while the Nomu Parallel Market Index declined 116.82 points, or 0.49 percent, to 23,551.47, reflecting continued volatility in the parallel market.
The main market saw 90 gainers against 171 decliners, indicating selective buying.
On the upside, Al Kathiri Holding Co. led gainers, closing at SR2.18, up SR0.12, or 5.83 percent. Wafrah for Industry and Development Co. advanced to SR23, gaining SR0.99, or 4.5 percent, while Al Ramz Real Estate Co. rose 4.35 percent to close at SR60.
SABIC Agri-Nutrients Co. added 4.21 percent to SR118.70, and Al Jouf Agricultural Development Co. climbed 4.12 percent to SR45.
Meanwhile, losses were led by Saudi Industrial Export Co., which fell 9.73 percent to SR2.69. United Cooperative Assurance Co. declined 5.08 percent to SR3.74, while Thimar Development Holding Co. dropped 4.54 percent to SR35.30.
Abdullah Saad Mohammed Abo Moati for Bookstores Co. retreated 4.15 percent to SR48.50, and Gulf Union Alahlia Cooperative Insurance Co. slipped 3.96 percent to SR10.44.
On the announcement front, Saudi National Bank announced its intention to issue US dollar-denominated Additional Tier 1 capital notes under its existing international capital programe, with the final size and terms to be determined subject to market conditions and regulatory approvals.
The planned issuance aims to strengthen Tier 1 capital and support the bank’s broader financial and strategic objectives.
The stock closed at SR42.70, gaining SR0.70, or 1.67 percent, reflecting positive investor reaction to the capital management move.
Separately, Almasane Alkobra Mining Co. said its board approved the establishment of a wholly owned simplified joint stock company to provide drilling, exploration and related support services, with a share capital of SR100 million and headquarters in Najran, subject to regulatory approvals.
The new subsidiary aligns with the company’s strategy to enhance operational efficiency and expand its role in the Kingdom’s mining sector.
Shares of Almasane Alkobra Mining closed at SR98.70, up SR0.30, or 0.3 percent, by the end of the session.
