LONDON (Reuters) – Global oil supply dropped in March as U.S. sanctions and power outages pushed Venezuela’s crude output to a long-term low of 870,000 barrels per day (bpd), the International Energy Agency said on Thursday, even lower than OPEC reported the day before.
“The blackouts are an additional challenge for Venezuela’s oil sector, already set back by economic collapse, corruption, mismanagement and – more recently – by U.S. sanctions,” the Paris-based IEA said in its monthly report.
The IEA, which coordinates the energy policies of industrialized nations, said the output decline of 270,000 bpd was Venezuela’s second largest month-on-month drop and put the country’s production at 600,000 bpd less than a year earlier.
Venezuela told the Organization of the Petroleum Exporting Countries that the nation pumped 960,000 bpd last month, a drop of almost 500,000 bpd from February, OPEC said on Wednesday.
OPEC, Russia and other non-member oil producers agreed to cut output by 1.2 million bpd from Jan. 1 for six months and are set to meet on June 25-26 to decide whether to extend the pact.
The IEA said the voluntary curbs of that deal and reduced output by Venezuela had caused OPEC production to fall 550,000 bpd in March.
The IEA also maintained its forecast of growth in global oil demand for 2019 at 1.4 mln bpd.
“Tightness in the oil market … is not just a supply story. In recent months, the resilience of demand has received less attention,” the IEA said.
“Although it is still early days the major centers of oil demand growth are performing strongly. In China, the economy seems to be reacting to the government’s stimulus measures,” it said, also noting strong demand in India.
Meanwhile, it said oil stocks in industrialized countries fell in February by 21.7 million barrels but remained above their five-year average.
Global refining throughput fell by 2.5 million bpd in March on unplanned outages, especially in the United States.
“Although the main sources of growth are doing well, there are mixed signals from elsewhere,” the IEA wrote.
“Concerns about trade talks linger, and the mood will be influenced by the recent downgrade to global GDP growth by the International Monetary Fund, although it should be noted that the IMF does not expect a recession in the near term.”
The United States and China have yet to find a solution to their dispute on trade, while the IMF on Tuesday cut its global economic growth forecasts.
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