The tale of ever-tightening oil inventories and reduced supply appears to be coming to an end, the International Energy Agency said on Thursday.
Saudi supply assurances, market speculation on a potential strategic stock release and hopes pinned on multilateral talks over Iran’s nuclear program have eased fundamentals and prompted falls in prices recently, the report said.
“Acknowledging that data remain preliminary, first quarter 2012 fundamentals nonetheless show a clear shift from the seemingly relentless tightening evident over the prior ten quarters,” the IEA said in its April report.
“Further surprises almost inevitably lurk around the corner for both demand and supply. But for now at least, the earlier tide of remorseless market tightening looks to have turned,” it said.
The agency left its forecast for 2012 global oil demand unchanged from last month’s report, and still expects global oil demand to rise to 89.9 million barrels per day in 2012, a gain 0.9 percent compared to 2011.
The regional breakdown of demand was little changed, with Asia continuing to dominate.
The only significant change from last month was the stronger growth now foreseen in oil-rich nations such as those in the Middle East and the former Soviet Union.
Demand estimates have been revised lower for more price sensitive regions, such as North America.