In its Monthly Oil Market Report released today, the International Energy Agency said positive economic indicators from the US and China, strong financial market activity and cooler Northern Hemisphere weather combined to push global oil price benchmarks above nine month highs in early February.
Bringing incremental oil production volumes to the global market has been challenging for producers. The recent deadly hostage crisis at a remote Algerian natural gas plant has led firms to re-evaluate their security protocols in the region, with one company pulling its staff out of Nigeria due to safety concerns, said the IEA.
Additionally, recent spare supply capacity increases may largely reflect Opec production cuts, meaning the apparent cushion between global supply and demand “may not be as comforting in reality as they otherwise would appear.”
“The market is undergoing dramatic changes in the regional distribution of both supply and demand growth, even as part of the oil
exporting world is caught up in a social and political shift of potentially farÃ¢Â€Âreaching consequences. It is
hard, under the circumstances, to overstate the challenges involved in bringing supply to market, which
often result in unprecedented price pressures,” the agency said in the report.