The International Energy Agency’s (IEA) monthly report has found that global oil supply has increased by 2.5 million barrels of oil per day (mmbbl/d) to 90 mmbbl/d after the cessation of voluntary cuts by Saudi Arabia, according to a press release.
On top of this, the United Arab Emirates (UAE) missed its OPEC+ targets, only honoring 10% of its agreed cutbacks in August and boosted output by 240,000 barrels per day (bbl/d) to 3.11 mmbbl/d. This is 520,000 bbl/d above its compliance target. The increase was partially driven by higher production of associated natural gas as the sheikhdom satisfied a summer surge in power generation.
In other highlights, the IEA report found global refinery intake is recovering, but the pace will lag behind the demand rebound as product inventory levels are very high. In July, crude runs were estimated at 3.7 mmbbl/d above the low point in May, with another 5.6 mmbbl/d ramp-up expected by the end of 2020. In 2020, runs will decline by 6.9 mmbbl/d but in 2021 they will rebound by only 4.5 mmbbl/d. Runs in 2021 will be 2.7 mbd below the historical peak seen in 2018.