Oil Inventories Declined Most Since 1999 in IEA Estimate
Oil inventories in advanced economies tumbled in the fourth quarter by the most since 1999 because of “surprising robustness” of demand in the U.S. and other developed nations, the International Energy Agency said.
The IEA, a Paris-based adviser to oil-consuming nations, also boosted forecasts for global fuel demand this year and the amount of crude that will be required from the Organization of Petroleum Exporting Countries. Stockpiles of crude and refined products in the Organization for Economic Cooperation and Development nations shrank by 1.5 million barrels a day in the last three months of 2013 to end the year at 2.6 billion, their lowest level since 2008, the IEA said.
“We expect this constructive trend in OECD inventories to continue through the first quarter, with some months where we would see less than seasonal builds, especially in the light of positive demand data we are seeing,'' said Miswin Mahesh, an analyst at Barclays Plc in London.
West Texas Intermediate futures have advanced 1.4 percent this year, trading close to $100 a barrel today, amid arctic weather and economic recovery in the U.S., the world’s largest oil consumer. The nation’s highest crude output in 25 years, driven by tapping shale formations in North Dakota and Texas, is reducing energy costs for manufacturing and petrochemical industries, aiding the economic rebound.
Supply Bounty
‘‘Far from drowning in oil, markets have had to dig deeply into inventories to meet unexpectedly strong demand,” the agency said. “A glut is looking increasingly elusive. U.S. demand strength likely reflects in part a structural response to the country’s supply bounty,” as surging shale oil output lowers costs for industries, the IEA said.
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