Oil is not out of the woods yet: BNP Paribas commodities chief

Recent downgrades to global economic growth forecasts suggest the crude market is not out of the danger zone, Harry Tchilinguirian, global head of commodity markets strategy BNP Paribas, said Thursday.

In its latest oil market report released Thursday, the International Energy Agency said a rebalancing of supply and demand is becoming evident. However, crude stockpiles remain "enormous" and would need time to fall, Neil Atkinson, head of oil industry and markets at the IEA, told CNBC Europe.

Tchilinguirian said the IEA remained conservative in its forecast for the year despite noting that demand growth for crude picked up in the first quarter. BNP Paribas is expecting weak global growth this year, citing the International Monetary Fund's latest downward revision last month.

"I think there's some caution here in terms of that pace of rebalancing, so oil is not exactly out of the woods just yet," Tchilinguirian told CNCB's "Squawk on the Street."

A string of unplanned outages has sustained bullish momentum in the crude market, he said. Prices got support this week after wildfires in Canada's oil sands region knocked out production, and an added boost from outages in Nigeria.

"All these interruptions in supply are keeping that bullish momentum alive. However, I think the market is sort of forgetting about the broader fundamentals, which still show excess supply over demand," he said.

On Wednesday, a surprise decline in U.S. crude inventories lent further support to oil prices, pushing U.S.-benchmark West Texas Intermediate above $47 a barrel for the first time this year.

BNP Paribas is concerned about that momentum because crude prices of $45 per barrel or more essentially throw U.S. shale drillers a lifeline, he said.

The market is expecting supply from these high-cost producers to continue to fall, and if that doesn't happen, oil prices could be heading for a correction this summer, he said.