Oil prices’ rebound falters over imminent record-high stocks

•Producers may record partial recovery in five years

THE rebound in oil prices lost some momentum yesterady as U.S. crude traded lower for the first time in four sessions after the International Energy Agency (IEA) warned of more selloffs in the near term as stocks continue to rise.

  Besides, the IEA has predicted that global oil prices would recover only partially over the next five years.

  The agency said that oil stockpiles in member countries of the Organization for Economic Cooperation and Development, which groups the world’s richest nations, may come approach a record high 2.83 billion barrels by mid-2015, which advises the West on energy policy.

 The Chief Executive of Swiss-based, Dutch-owned energy and commodity trader, Vitol, Ian Taylor, told the International Petroleum Week industry conference in London, that there may be a “dramatic” build in oil stocks over the next few months.

  U.S. crude CLc1 was down by 50 cents, or one per cent, at $52.36 a barrel at 1425 GMT, after hitting a session low at $51.86. It had gained nearly 10 percent over the past three sessions, and almost 19 per cent in a broader rebound between January 29 and February 9.

  Benchmark Brent crude was flat, trading seven cents up at $58.41, recovering from a low of $57.41 earlier in the day.

  Also, the US benchmark West Texas Intermediate (WTI) for March delivery slipped 70 cents to $52.16 a barrel compared with Monday’s close.

  Brent North Sea crude for March slid 35 cents to stand at $57.99 a barrel in London.

  IEA said in its Medium Term Oil Market report released yesterday that the United State, which used to depend on Nigeria’s crude oil will remain the world’s top source of oil supply growth up to 2020. 

  The agency also said that oil prices, which slid from $115 a barrel in June to a near six-year low close to $45 in January, would likely stabilise at levels substantially below the highs of the last three years.  

“The market rebalancing will likely occur relatively swiftly but will be comparatively limited in scope. The price correction will cause the North American supply ‘party’ to mark a pause; it will not bring it to an end,” it said. 

  It said that despite expectations of tightening balances by end-2015, downward market pressures might not have run their course just yet.

  In its monthly market report for February, IEA said that global supplies fell by 235 000 barrels per day (235 kb/d) in January to 94.1 mbpd on lower OPEC and non-OPEC.

  The report stated: “Reductions in capital expenditures have cut projected 2015 non‐OPEC supply growth to 800 kbpd. US 2015 production is seen 200 kbpd lower than in last month’s Report, at an average 12.4 million barrels per day (mbpd), with most of the cuts in the second half of the year.

   “OPEC crude oil output fell by 240 kbpd in January to 30.31 mbpd, led by losses from Iraq and Libya, though output from Saudi Arabia, Kuwait, Angola and Nigeria edged up. Downward revisions to the non‐OPEC supply growth forecast for the second half have raised the “call” on OPEC to an average 30.2 mbpd – just above the group’s official target of 30 mbpd.

  “The forecast of global oil demand growth for 2015 is unchanged from the January OMR, at 0.9 mbpd, bringing average demand for the year to 93.4 mbpd. Growth is expected to gain momentum from a modest 0.6 mbpd gain in 2014, on a slightly improved macroeconomic outlook.”

 “Global refinery crude throughputs rose by 1.1 mbpd in December, to 79.1 mbpd, before maintenance curbed activity in January. An unexpected dip in Saudi Arabian runs in November underpins a 140 kbpd downward revision to last month’s assessment of fourth-quarter 2014 runs, to 78.1 mbpd. Throughputs are projected to fall to 77.6 mbpd in the current quarter”.