April 14, 2018-Oil prices edged higher on Friday, heading for their largest weekly gain since July after US President Trump's comments about possible military action in Syria and reports of dwindling global oil stocks. A price increase of that size and speed "can dampen oil demand growth to some extent".
Light, sweet crude for May delivery recently was up 31 cents, or 0.5%, to $67.38 a barrel on the New York Mercantile Exchange, the highest level since 2014.
"We have seen an accelerated shrinkage of stocks in storage from unparalleled highs of about 400 million barrels to about 43 million above the five-year average", Opec Secretary General Mohammad Barkindo said.
OPEC said on Thursday that healthy economic growth, strong auto sales and USA product consumption should help boost the global market for oil products in coming months.
OPEC has made the five-year average its main target and managed to reduce the glut to around 74 million barrels above that benchmark, from above 300 million when the cuts began in 2017.
Confirming estimates by S&P Global Platts, the IEA said a third of the March cuts came as a result of intentional reductions from Venezuela and Mexico, which have lost a combined 890,000 b/d versus the October 2016 baseline.
"It is not for us to declare on behalf of the Vienna agreement countries that it is "mission accomplished", but if our outlook is accurate, it certainly looks very much like it", the IEA said.
Freezing rain warning issued for Guelph and area
Thus an accumulation of ice is possible later on Saturday into Saturday night which will cause for some risky travel conditions. The national weather agency added that driving conditions could also be "hazardous" in some areas.
The IEA said Opec's compliance rate with these supply cuts was at 163 per cent in March due to extra cutbacks in places like Venezuela, Libya and Angola, while its non-Opec partners achieved a 90 per cent compliance rate.
"The Syrian escalation risk can not be fully written off, but we view that it deserves less of a premium than three days ago", Petromatrix said in a note.
It estimated that, if OPEC's stock level metric were widened to the 10-year average, the surplus would increase to 108 million barrels in February, a level that would "likely take several more months to draw down".
Despite this, supplies remain ample and analysts said this would weigh on prices eventually.
Crude futures prices last month were roughly 1% higher than in February, thanks to geopolitical tension in the Middle East, strong conformity to the oil production reduction pact, a weaker US dollar, large USA crude stock draws and expectations of higher oil demand.
First-quarter demand from non-OECD countries was revised downward by 260,000 barrels a day "due to weak Chinese data".