Very high oil stocks are a threat to the recent stability of prices.
That’s despite the oil market expected to see a balance, according to the International Energy Agency (IEA).
Its Oil Market Report (OMR) stated: “With global refinery runs expected to fall by 0.8mb/d in 2Q16 before surging by 2.4mb/d in 3Q16, we may well see crude oil stocks fall back but there is a risk that, unless demand turns out to be stronger than we currently anticipate, products stocks could rise still further and threaten the whole price structure.”
Global oil supplies rose by 0.6 million barrels per day (mb/d) to 96mb/d in June.
OPEC crude output rose by 400,000b/d in June to an eight-year high of 33.21mb/d.
Production in Saudi Arabia rose to a near-record rate of 10.45mb/d, it added.
According to the IEA, non-OPEC supplies are set to decline by 0.9 mb/d to 56.5 mb/d, before rising again in 2017.
It added: “Preliminary information for June suggest that OECD stocks added a further 0.9mb while floating storage has continued to build, reaching its highest level since 2009.”