IEA welcomes crude market’s return to surplus

Bloomberg

The International Energy Agency (IEA) welcomed the oil market’s return to surplus as Opec’s production surge sw-ells global stockpiles and drives prices into a bear market.
Inventories in industrialised nations have increased for four straight months and are set to jump by 2 million barrels a day next half if current output is maintained, the IEA said in its monthly report. The supply boom has seen prices tumble from a four-year high, offering respite to consumers in emerging markets worst affected by crude’s rally.
“Rising stocks should be welcomed as a form of insurance, rather than a threat,” the agency said on Wednesday. “The response to the call by the IEA and others to increase production is a reminder that the oil industry works best when it works together.”
The IEA warned last month that high energy prices could present a risk to global economic growth. Benchmark crude futures soared in early October on fears that American sanctions against Iran would crimp supply. Yet a production push in Saudi Arabia, Russia and the US, as well as unexpected US waivers for some buyers of Iranian crude, have provided the market with a buffer to potential supply shocks.