Daily Management Review

US Energy Department: Oil reserves growth will gain speed in Q2, slowdown expected later


The US Department of Energy expects accelerated growth in world oil reserves in the second quarter to 11.5 million barrels per day from 6.6 million barrels per day in the first quarter, further reducing them, according to a monthly short-term forecast by the US Energy Information Administration (EIA).

"The EIA expects the largest increase in world oil reserves in the first half of 2020: in the first quarter, it amounted to 6.6 million barrels per day and will increase to 11.5 million barrels per day in the second quarter as a result of restrictions on movement in the world and a sharp decline in economic activity," the report reads.

"Strengthening demand (for oil) as the global economy begins to recover and supply growth is slowing (in the oil market) will contribute to the fact that in the third quarter oil reserves will begin to decline," the paper notes.

The report adds that the peak in world oil reserves growth was reached in April, amounting to 22.8 million barrels per day. However, the overall dynamics for the first half of the year may lead to an increase in world reserves by 1.6 billion barrels and almost full storage in the world.

"The EIA expects global oil reserves to decline by an average of 2.5-3 million barrels per day, starting from the third quarter to the end of 2021, given the OPEC + agreement, a decrease in US oil production due to economic conditions and a revival global demand. A reduction on this scale will help to a large extent get rid of stocks accumulated in the first half of 2020," the EIA summarizes.

Thus, in general, in 2020, the EIA expects an increase in world oil reserves of 2.6 million barrels per day after a decrease of 0.2 million barrels per day in 2019. This will be the largest growth in at least 40 years. In 2021, a decrease of 1.9 million barrels per day is expected.

source: reuters.com