Oil market could tilt into deficit if Opec sticks to cuts: IEA

Global oil inventories rose for the first time in January as the market grappled with a swell in production last year, but if the Organisation of the Petroleum Exporting Countries (Opec) maintains its output cuts, demand should overtake supply in the first half of this year, the International Energy Agency said on Wednesday.

The IEA’s monthly report struck a more bullish note than that issued by the Opec on Tuesday.

Opec also flagged rising inventory levels, but raised its estimates for production outside the group and did not see a rebalancing between supply and demand until the second half of this year.

The IEA said crude stocks in the world’s richest nations rose in January for the first time since July by 48 million barrels to 3.03 billion barrels, more than 300 million barrels above the five-year average.

“The actual build in OECD stocks in January reminds us that it may be some time before global stocks start to fall,” the agency said.

The increase is the product of “relentless” supply growth in the latter stages of last year, particularly from Opec countries that pumped at record levels, and from the US shale oil basin, where drilling activity began picking up 10 months ago.