Mubasher: The International Energy Agency (IEA) on Wednesday reported that industrialised countries have seen a three-year record fall in their commercial oil stockpiles, indicating that the global supply glut has been cleared up and the market recovered.
Oil inventories for countries under the Organization for Economic Cooperation and Development (OECD) dropped in March by 26.8 million barrels to 62.819 billion barrels, from a month earlier, the IEA’s oil market report showed.
The March figure is 1 million less than the latest five-year average gauge widely used by oil traders in assessing rebalancing process.
The sharp drop in oil stockpiles indicates that the production cut efforts led by the Organization of the Petroleum Exporting Countries (OPEC) have successfully mopped up excessive global supply that weighed on the market since 2014.
It is noteworthy that OPEC and other major non-OPEC oil producers, including Russia, have been withholding around 1.8 million barrels per day (bpd) of crude for almost a year under the terms of an agreement due to expire by the end of 2018.
By 3:12 pm GMT, Nymex crude plunged 0.39% to $71.03 per barrel (pb), while Brent crude futures fell 0.32% to $78.18 pb.