Commercial oil stocks in industrialized economies have fallen to their lowest level in three years, the International Energy Agency said Wednesday, in the latest sign that the global supply glut has been mopped up and the market rebalanced.
In its closely watched monthly oil market report, the IEA said commercial oil inventories for Organization for Economic Cooperation and Development countries declined in March by 26.8 million barrels to 62.819 billion barrels month-on-month. That’s 1 million barrels below the latest five-year average metric widely used by oil market participants to assess the rebalancing process.
The IEA suggested the drawdown in stocks was evidence that efforts led by the Organization of the Petroleum Exporting Countries to cut crude output had succeeded in clearing up excess global supply that has weighed on the oil market since late 2014.
OPEC and 10 producers outside the oil-cartel, including Russia, have been holding back crude production by roughly 1.8 million barrels a day since the start of last year. The agreement, which was extended in November, is set to expire at the end of this year.
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