IEA issues warning on oil inventories

Oil stocks in consumer nations posted the biggest first-quarter drop in a decade and may fall further in coming months, the International…

Oil stocks in consumer nations posted the biggest first-quarter drop in a decade and may fall further in coming months, the International Energy Agency (IEA) said today.

In its April monthly report, the adviser to 26 industrialised countries also shaved its 2007 world oil demand forecast by 250,000 barrels per day (bpd) to 85.8 million bpd due to a mild winter in Europe and Asia.

Oil inventories are falling as supply cuts by the Organization of Petroleum Exporting Countries (Opec) kick in. Lower stocks have helped boost US crude prices towards $63 a barrel from below $50 in mid-January.

Inventories in the Organisation for Economic Co-operation and Development (OECD) fell by 80.5 million barrels in February.

READ MORE

Preliminary March data for the United States, Japan and Europe suggest OECD stocks may fall by about one million bpd in the first quarter, the agency said.

That would be the highest rate of decline since the same period in 1996, the IEA said, although final data are needed to confirm the drop.

Final March figures will be available in June and provisional data in May.

Oil prices rose after the IEA report was released, with US crude up 68 cents at $62.69 a barrel earlier today.