“The sharp rise in oil to around $ 70 a barrel spurred conversations about a new super cycle and an impending supply shortage. Our data and analysis suggest otherwise, ”said the IEA in its monthly report.
“To start with, oil stocks still seem large compared to historical levels, despite a steady decline … In addition to the stock cushion, a large amount of spare production capacity has been accumulated as a result of OPEC’s supply constraints +, ”He said.
The Organization of Petroleum Exporting Countries and its allies, a group dubbed OPEC +, largely maintained production limits this month, galvanizing the market and causing some investors to predict a super cycle – a huge multi-year price increase.
“The prospect of stronger demand and the continued containment of OPEC + production point to a sharp drop in inventories during the second half of the year,” said the Paris-based energy watchdog.
“For now, however, there is more than enough oil in tanks and underground to keep global oil markets adequately supplied.”