The International Energy Agency (IEA) said it will only be by October that oil supply will recover because production losses due to Hurricane Ida will negate production growth at OPEC.
And according to the agency's monthly report, demand and supply must match, so if OPEC continues to increase output, consumers should have seen an increase in numbers as well. But in August, global shipments fell by 540,000 barrels per day, and in September should remain at the same level due to unexpected disruptions.
Fortunately, the decline in supply did not have much of an impact on prices because global demand has been falling since July amid rising COVID-19 cases. Such caused mobility constraints in Asia, not to mention for the larger part of this month, the price of oil in New York was around $ 70 a barrel.
The IEA said monthly global consumption will further decrease by an average of 310,000 b / d, but there are already signs that the spread of the coronavirus is waning. Thus, there is a chance that demand will skyrocket by 1.6 million b / d next month, and will continue up to the end of the year.
But corresponding shifts in supply and demand meant that the prevailing trend in the oil market this year - declining reserves - is unabated. According to preliminary estimates by the IEA, fuel reserves in developed countries fell by 30 million barrels in August. This is 186 million barrels below the average of the past five years.
Hurricane Ida, which struck the Gulf Coast on August 29, also halted production of around 1.7 million barrels of oil per day. But over the next few weeks, the industry will restart many of the affected fields. Nevertheless, the IEA expects production to fall by an average of 650,000 b / d in September.
The total loss of supplies is approximately 30 million barrels, making Ida the most destructive hurricane to hit the industry since Katrina and Rita in 2005.
Meanwhile, another storm named Nicholas hit the Texas coast on Tuesday and could cause flooding in Houston and parts of Louisiana.
Talking about OPEC, total output in August fell 150,000 b/d to 41.58 million barrels as increases in supplies from Saudi Arabia, Iraq and Russia failed to offset losses in Nigeria, Kazakhstan and Mexico.
So, in September, the group plans to recover an additional 400,000 b/d of downtime, but members such as Nigeria, Angola and Malaysia continue to struggle to increase production.