Oil inventories in advanced economies tumbled in the fourth quarter by the most since 1999 because of “surprising robustness” of demand in the U.S. and other developed nations, the International Energy Agency said.
The IEA, a Paris-based adviser to oil-consuming nations, also boosted forecasts for global fuel demand this year and the amount of crude that will be required from the Organization of Petroleum Exporting Countries. Stockpiles of crude and refined products in the Organization for Economic Cooperation and Development nations shrank by 1.5 million barrels a day in the last three months of 2013 to end the year at 2.6 billion, their lowest level since 2008, the IEA said.
“We expect this constructive trend in OECD inventories to continue through the first quarter, with some months where we would see less than seasonal builds, especially in the light of positive demand data we are seeing,'' said Miswin Mahesh, an analyst at Barclays Plc in London.
West Texas Intermediate futures have advanced 1.4 percent this year, trading close to $100 a barrel today, amid arctic weather and economic recovery in the U.S., the world’s largest oil consumer. The nation’s highest crude output in 25 years, driven by tapping shale formations in North Dakota and Texas, is reducing energy costs for manufacturing and petrochemical industries, aiding the economic rebound.
‘‘Far from drowning in oil, markets have had to dig deeply into inventories to meet unexpectedly strong demand,” the agency said. “A glut is looking increasingly elusive. U.S. demand strength likely reflects in part a structural response to the country’s supply bounty,” as surging shale oil output lowers costs for industries, the IEA said.
Global oil demand growth will “gain momentum” this year, expanding by 1.3 million barrels a day, or 1.4 percent, to a record 92.6 million a day, the agency said. The estimate is 120,000 barrels a day higher than last month’s forecast, as stronger growth in developed nations compensates for the weaker performance of emerging nations.
OPEC, responsible for 40 percent of global oil supplies, will need to provide more crude this year than previously expected, the agency said. While the group’s current output levels are higher than the average amount required this year, the excess may be necessary “if badly depleted inventories are to be rebuilt,” the IEA said.
OPEC’s 12 members will need to pump an average 29.6 million barrels a day this year, or 100,000 a day more than predicted in last month’s report. The group’s output increased in January to 29.99 million barrels a day amid recovering supplies from Libya, according to the report. That’s in line with the organization’s collective target of 30 million.
Supply losses in OPEC nations Libya, where production collapsed by 1 million barrels a day in the second half, and Iraq have contributed to the tightening in oil inventories, the agency said. While Libyan output rose in January to a five-month high of 500,000 barrels a day, “it may be some time before Libya sorts out its problems and brings supply back to pre-civil war levels,” according to the IEA.
Saudi Arabia, the group’s biggest member and de facto leader, trimmed production in January by 60,000 barrels a day to 9.76 million a day.
Inventories of crude and oil products in advanced nations declined by 56.8 million barrels in December, more than normal for the month, to 2.6 billion barrels, the IEA said. That left stockpiles 103 million barrels below their five-year average. Preliminary data for January indicate inventories rose by 1.3 million barrels, compared with an average gain of 43.7 million for the month in the past five years, according to the agency.
The IEA kept estimates for supplies from outside OPEC in 2014 unchanged. Non-OPEC production, led by the U.S., Canada and Brazil, will increase by 1.75 million barrels a day to 56.4 million a day this year, the agency said.