Cuts made by the Opec+ cohort are of predominately sour grades, while the US continues to ramp outout of light, sweet volumes (MEES, 15 February). The IEA’s latest monthly Oil Market Report (OMR) for February rings an alarm of an increasingly tight market for heavier sour crudes.

If Opec pumps at January levels of 30.81mn b/d for the rest of the year, the OMR’s numbers indicate global inventories will rise by 55mn barrels. Opec’s monthly report implies a stockbuild of 79mn barrels, with mid-year drawdowns (see chart). Both imply supply and demand nearing balance. Indeed, if Opec output falls further to 30.60mn b/d then demand would outstrip supply. (CONTINUED - 837 WORDS)