The US momentarily overtook Saudi Arabia and Russia as the world’s largest gross oil exporter in June, according to preliminary data from the International Energy Agency (IEA) monthly report released on Thursday.
The US’ brief stint as the largest producer reflects a rebound in the country’s output following Hurricane Dorian and the impact of OPEC+ supply cuts.
“A reminder to the producers that competition for market share is getting tougher comes from preliminary data showing that in June the US momentarily overtook Saudi Arabia and Russia as the world’s number one gross oil exporter,” said the IEA.
The agency also said that its 2019 and 2020 global oil demand growth forecasts are unchanged at 1.1 million barrels per day (mb/d) and 1.3 mb/d respectively as the IEA assumes, “no further deterioration in the economic climate and in trade disputes,” suggesting demand forecasts need not be revised down.
Oil supplies have rebounded, with global oil supply increasing to 100.7 mb/d, an increase of 530,000 barrels per day (bdp). This increase was primarily the result of US, Norwegian, and Brazilian increases and lowered the need for OPEC crude to 28.3 mb/d in H1 2020. The IEA noted that compliance with the OPEC+ supply cut agreement fell to 116 percent in August, with three major suppliers - Russian, Nigeria and Iraq - all producing 0.6 mb/d more than their allocation.
The report identified said that oil stocks are due to increase again soon. The IEA warned that OPEC+ producers will begin to see a surging increase in non-OPEC oil production, with an implied market balance returning to a significant surplus. This will put pressure on oil prices and challenge market management well into 2020.
“For the second half of 2019 we retain the view that with oil prices currently about 20 percent lower than a year ago, there will be support for consumers,” said the IEA.