“The surge in oil to nearly $ 70 a barrel has led to talk of a new super cycle and an imminent supply shortage. Our data and analysis suggest otherwise, ”the IEA said in its monthly report.
“For a start, oil inventories still look generous compared to historical levels, despite a steady decline … On top of the inventory cushion, a fair amount of spare production capacity has been built up as a result of OPEC + supply constraints,” he said.
The Organization of the Petroleum Exporting Countries and its allies, a group called OPEC +, largely adhered to production restrictions this month, boosting the market and making some investors predict a super cycle – a big, multi-year price hike.
“The prospect of stronger demand and continued production cuts from OPEC + point to a sharp decline 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.”