More oil needed globally

“Far from drowning in oil, markets have had to dig deeply into inventories to meet unexpectedly strong demand.” This was how the International Energy Agency summed up the status of oil market after looking at the figures in the last quarter of 2013. Analysts have warned of an oil glut, with outputs by the OPEC dropping to 6-year lows. However, oil demands in advanced economics, led by the United States, picked up, arresting a decline in rate over the past 5 years. IEA noted that traditionally this would be a time of lower seasonal demand for oil and market participants would often worry about excess supply and feel the need for OPEC to cut down on its production. This is a “particularly misplaced” concern now because “the market needs to replenish exceptionally low stocks.”

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