In its closely watched monthly report, the IEA said oil supply had come down by 720,000 barrels a day last month from July, to 97.7 million barrels a day.
The global oil surplus is beginning to shrink due to stronger-than-expected European and US demand growth, as well as production declines in OPEC and non-OPEC countries, the International Energy Agency said on Wednesday. OPEC supply fell by 210,000 barrels, marking the first decline in five months.
The global surplus of crude and stocks over the five-year average fell to 190 million barrels.
For this year, the IEA sees the need for OPEC crude at 32.7 million bpd, in line with the current production.
Oil prices remain below $50 a barrel in NY, less than half the level traded three years ago, as the Organisation of Petroleum Exporting Countries and fellow producers struggle to clear a global glut despite cutting their output for nearly nine months.
“Depending on the pace of recovery for the US refining industry post-Harvey, very soon OECD product stocks could fall to, or even below, the five-year level”, it said referring to Hurricane Harvey which hit the United States two weeks ago.
Looking at recent developments in the oil futures markets, the IEA called them “a sign that oil markets have started to rebalance”.
It was the first fall in global production in four months.
“It is clear that the rebalancing process is under way, supported by the high conformity levels of OPEC member countries and participating non-OPEC countries to the production adjustments” in the cooperation agreement, OPEC secretary general Sanusi Barkindo said in a speech in Oxford on Monday.
Global oil demand will climb this year by the most since 2015, the International Energy Agency (IEA) said, amid stronger-than-expected consumption in Europe and the US. Compliance levels in August hit 82 per cent compared with 75 per cent.
“Outright benchmark crude prices gained in August, reflecting higher demand in the northern hemisphere and tight physical markets for oil products”, the IEA said.
The International Energy Agency says that global oil demand will grow at a much faster rate this year than previously estimated.
IEA also raised its forecast for world oil demand in 2018 by 100,000 barrels per day to 99.1 mln barrels per day, the forecast for the growth in demand in 2018 was also increased by 100,000 barrels per day to 1.4 mln barrels per day.
Demand grew by 2.3 million barrels per day (mb/d), or 2.4 per cent, in the second quarter of 2017, prompting the Paris-based organisation to increase its growth estimate for the year to 1.6 mb/d, or 1.7 per cent.