In its latest forecast of the global oil trend, the agency maintained its previous estimate of 800,000 barrels per day in demand growth this year.
The 2013 estimate is about 200,000 barrels per day higher than most recent forecasts by the US Energy Information Administration and OPEC, but still reflects a market slowdown in oil demand growth in the industrialised economies.
“While stronger than the estimated 800,000 gain envisaged for 2012, growth remains well below the pre-credit crunch trend,” the agency commented.
The IEA estimates world oil demand at 90.9 million barrels per day in 2013, and says fuel consumption in the developed economies of the OECD will be overtaken for the first time by non-OECD demand in the second quarter, “a trend that is unlikely to be reversed”.
Stocks of crude oil in the large industrialised economies rose by more than 15 million barrels in May, the IEA said, to over 2.67 billion barrels.
Total oil inventories in days of forward demand fell slightly, by 0.8 days to 58.9 days, in May but this still left stocks 1.4 days above the five-year average.
“The oil market is over-supplied,” said Barbara Lambrecht, energy markets analyst at Commerzbank in Frankfurt told Reuters.
“OPEC supply is high, well above what consumers need right now. If anything, the IEA estimate of the build in oil stocks is lower than we would have expected. Supply is very comfortable.”
While acknowledging oil market fundamentals had “clearly eased since the start of the year” and that stocks had built up significantly over the last few months, the IEA insisted any move by OPEC to reduce production to its declared output target of 30 million barrels per day could have a dramatic impact on the market.
“Strict adherence to the previous 30 million barrels per day quota risks a renewed and potentially damaging price surge,” the advisory agency said.
The IEA said the 12 members of OPEC pumped close to 31.8 million barrels per day in June, before the imposition of an EU oil embargo and tougher US sanctions on Iran.
This was 1.3 million barrels per day higher than its estimate for the demand for OPEC crude oil this year and in 2013 and helped contribute to a further increase in global oil inventories.
The IEA said Iranian crude oil production fell to near 22-year lows in June as Western pressure over its nuclear programme curbed purchases by refineries, especially in Europe and Asia.
The agency estimated Iranian crude output at 3.2 million barrels per day in June, down from 3.3 million barrels per day in May.
But an increase in production by Saudi Arabia more than
compensated for the decline in Iranian output as production by the kingdom rose 150,000 barrels per day to 10.15 million barrels per day in June, a level the IEA said was “near-record”.
At the same time, oil production by non-OPEC countries is also high and rising, the IEA said, forecasting an overall increase of around 700,000 barrels per day in 2013 to 53.2 million barrels per day after an increase of about 400,000 barrels per day this year.